Market Scorecard: 2017 Begins With Technical Warnings
The weekly charts for the Dow Jones Industrial Average (INDU) , S&P 500 , Nasdaq Composite (NDAQ) , Dow Transports and the Russell 2000 have positive but overbought weekly charts, but without new all-time intraday highs in the last week of the year. A stronger open on the first trading day of 2017 has investors back on Dow 20,000 watch.
The Nasdaq 100 set a new all-time intraday high on Dec. 27, but it may become the downside correctional leader, without becoming overbought. Why? The last week of 2016 was a "key reversal" for the Nasdaq 100 as the 2016 close of 4,863.62, below the low of 4,911.75 set during the week of Dec. 23. This after the index set an all-time intraday high of 4,992.08.
The Dow 30 set its all-time intraday high of 19,987.63 on Dec. 20. The S&P set its all-time intraday high of 2,277.53 on Dec. 13. The Nasdaq Composite set its all-time intraday high of 5,512.37 on Dec. 27, and ended the week with a weekly "key reversal". Dow Transports and Russell 2000 set their all-time intraday highs of 9,490.29 and 1,392.71, respectively, on Friday Dec. 9. The two with the largest gains for 2016 were thus the first to peak.
Here's how to trade these markets using exchange-traded finds.
Here's the weekly chart for the SPDR Dow Jones Industrial Average ETF (DIA) , aka Diamonds.
Courtesy of MetaStock Xenith
Diamonds trades at $198, up 13.5% in 2016 and set its all-time intraday high of $199.83 on Dec. 14. This ETF is in bull market territory 27.9% above its Jan. 20 low of $154.38.
The weekly chart for Diamonds is positive but overbought with the ETF above its key weekly moving average of $193.41 and well above its 200-week simple moving average of $169.48. The weekly momentum reading rose to 90.52 last week up from 89.15 on Dec. 23, moving further above the overbought threshold of 80.00.
Investors looking to buy Diamonds should do so on weakness to $194.66, which is a key level on technical charts until the end of January. A lower value level is $182.90, in play until the end of March. Investors looking to reduce holdings should do so on strength to $208.59 and $210.16, which are key levels on technical charts until the end of this week, and until the end of June, respectively.
My annual value level lags at $150.83 with annual and semiannual risky levels of $220.14 and $221.34, respectively.
Here's the weekly chart for SPDR S&P 500 ETF Trust (SPY) , aka Spiders.
Courtesy of MetaStock Xenith
Spiders trades at $223.50, up 9.6% in 2016 and set its all-time intraday high of $228.34 on Dec. 13. This ETF is in bull market territory 23.5% above its Jan. 20 low of $181.02.
The weekly chart for Spiders is positive but overbought with the ETF above its key weekly moving average of $221.63 and above its 200-week simple moving average of $195.33. The weekly momentum reading slipped to 83.34 last week down from 83.97 on Dec. 34, with both readings well above the overbought threshold of 80.00.
Investors looking to buy Spiders should do so on weakness to $213.62, which is a key level on technical charts until the end of March. Investors looking to reduce holdings should consider selling strength to $227.04, which is a key level on technical charts until the end of January.
My annual value level lags at $167.75 with annual and semiannual risky levels of $253.37 and $260.40, respectively.
Here's the weekly chart for the PowerShares QQQ Trust ETF (QQQ) , dubbed QQQ.
Courtesy of MetaStock Xenith
QQQ trades at $118.50, up 5.9% in 2016, and set its all-time intraday high of $121.52 on Dec. 27. This ETF is in bull market territory 24.9% above its Feb. 8 low of $94.84. After setting a new high last week the weekly close was below the prior week's low of $119.55, which is a weekly "key reversal".
The weekly chart for QQQ is positive with the ETF above its key weekly moving average of $118.28. The ETF is above its 200-week simple moving average of $98.39. The weekly momentum reading rose to 74.18 last week up 72.81 on Dec. 23. Warning - A close on Jan. 6 below $118.28 with momentum falling below 74.18 will shift the weekly chart to negative.
Investors looking to buy QQQ should consider buying weakness to $113.54, which is the 200-day simple moving average. The most important level as 2017 begins is a quarterly pivot of $118.68. Weekly closes below $118.68 indicates risk to an annual value level of $98.20. Investors looking to reduce holdings should consider doing so on strength to $122.77, which is a key level on technical charts for this week only.
My annual value level lags at $98.20 with monthly semiannual and annual risky levels of $125.33, $139.27 and $139.42, respectively.
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