As of the close of Friday, November 4, 2011, there are 8 changes in the ETF trend state table from last week’s report. It is interesting that all the changes relate to sideways price motion, primarily in the short-term. This is an indication that all markets that are represented by the ETFs tracked in this report, specifically stock indices, commodities, currencies and bonds, are near important turning points and their future medium-term and longer-term direction is still undecided.
| ETF | Short-term | Medium-term | Longer-term |
OB/OS |
| SPY |
SW- |
UP |
SW- |
|
| QQQ |
SW- |
UP |
UP |
|
| GLD | UP |
SW |
UP |
|
| SLV |
SW- |
SW |
SW |
|
| FXE |
SW- |
UP |
SW |
|
| TLT |
SW+ |
SW+ |
UP |
|
| USO |
UP |
UP |
SW |
|
| DBC |
SW- |
UP |
DN |
SW” indicates no trend, ”+” indicates a new upward trend change, “-” indicates a new downward trend change, “OB” means overbought and “OS” means oversold. “OB-” means close to becoming overbought and “OS+” means close to becoming oversold. The ‘*’ means that the corresponding market is under watch for developing conditions.
Summary of trend changes
Short-term: SPY, QQQ, SLV, FXE, TLT and DBC are now moving sideways short-term
Medium-term: TLT has been upgraded to medium-term sideways motion
Longer-term: SPY has been downgraded to medium-term sideways motion
Overbought/Oversold Conditions
There are no oversold/overbought conditions in any of the 8 ETFs tracked.
Commnets and technical analysis
There was only one change in the longer-term direction of the tracked ETFs, from up to sideways, but that was due to SPY prices testing their 200-day simple moving average support as shown on the chart below:
In contrast, QQQ has already tested its 200-day simple,moving average support 4 times in the past 3 weeks. The MEI(14), my proprietary indicator, is flat and a move in either direction is imminent.
SLV has formed a flag with a target objective close to the 200-day simple moving average resistance:
The upside potential in the SLV case is about $2.5 but there is always a possibility of a violent correction after the test of the resistance unless there is an attempt to close the second gap above $36 in which case the 200-day simple moving average may turn to support.
Although TLT recovered significantly from its recent drop, it has problems holding on to its gains. A test of support near $114 seems quite possible at this point.
Have a good trading week!
Charting program: Amibroker (Charts created with AmiBroker – advanced charting and technical analysis software. http://www.amibroker.com/”)
Disclosure: Long QQQ puts.
Disclaimer:The author is not a financial advisor and does not recommend the purchase of any security or advise on the suitability of any trade or investment in any timeframe. ETF, stock, futures, forex and options trading and investing involves substantial financial risks and can result in total loss of capital. If investment or other professional advice is required, a licensed professional should be consulted.
