The Nasdaq 100 ETF Continues To Lead Diamonds, Spiders, Transports And Small Caps

Summary

• The Nasdaq 100 ETF ended last week with a positive weekly chart offsetting negative weekly charts for the other four.
• The QQQ’s is well above its 50-day simple moving average, while Diamonds and Transports are below their 50-day SMAs.
• Spiders and Small Caps ETFs are on the cusp of their 50-day simple moving averages.
• The daily charts will show that key levels held at last week’s lows, and today risky levels remain as barriers preventing new highs.

Technology leadership remains the theme of the daily charts for the five equity ETFs. The Nasdaq 100 QQQ held its 50-day simple moving average at the March 2 lows. Spiders opened this morning (March 6) right on its 50-day SMA. The Russell 2000 ETF has been trading back and forth around its 50-day SMA since Feb. 16. Diamonds have been below its 50-day since Feb. 28 and the Transportation ETF since Feb. 27.

This shows the importance of tech leadership as Apple (AAPL)set an all-time intraday high of $180.62 on Feb. 28. Amazon (AMZN) set its all-time intraday high of $1,542.13 on March 6. Recent strength on Microsoft (MSFT) failed below its all-time intraday high of $96.07 set on Feb. 2. Strength on the three largest components of QQQ’s could not force the tech-heavy ETF to trade to a new high.

My opinion remains that rising rates by the Federal Reserve and the unwinding of the Fed’s balance sheet is the main reason for stock market volatility. You cannot mix an expansionary fiscal policy with a Federal Reserve that’s tightening monetary policy.

Today I will show that the daily charts for the five major equity ETFs.

The P/E ratios for the major equity averages remain elevated; 26.03 for the Dow 30, 25.23 for the S&P 500, 26.31 for the Nasdaq and 130.52 for the Russell 2000. Dow Transports are cheap with a P/E of 11.81.

The Scorecard For These Equity ETFs

SPDR Dow Jones Industrial Average ETF (DIA)

Courtesy of MetaStock Xenith

The daily chart for Diamonds ($250.18 at March 6 open) shows the ETF is below its 50-day simple moving average of $252.17. The horizontal levels are value levels, pivots and risky levels. Weakness on March 2 held my quarterly pivot of $242.48. The ETF is above my annual pivot of $246.52.

Investors should buy weakness to my semiannual value level of $230.11 and reduce holdings on strength to my weekly and monthly risky levels of $253.26 and $264.03, which are below the all-time intraday high of $265.93 set on Jan. 26.

SPDR S&P 500 ETF Trust (SPY)

Courtesy of MetaStock Xenith

The daily chart for Spiders ($273.30 at the March 6 open) shows the ETF failed at its 50-day simple moving average of $273.30 at the open. The horizontal lines are pivots and risky levels. Note that the March 2 low was between my quarterly and semiannual pivots of $266.66 and $264.10, respectively.

Investors should buy weakness to its 200-day simple moving average which is rising at $256.26. Investors should reduce holdings on strength to my weekly and monthly risky levels of $274.99 and $282.58, respectively. These levels are below the all-time intraday high of $286.62 set on Jan. 26.

PowerShares QQQ Trust ETF (QQQ)

Courtesy of MetaStock Xenith

The daily chart for QQQ’s ($168.61 at March 6 open) shows that this tech-heavy ETF closed above its 50-day simple moving average of $163.66 on March 2. The horizontal lines are value levels, pivots and risky levels. Note how my quarterly value level of $150.56, which held at the Feb. 9 low.

Investors should buy weakness to my semiannual and annual pivots of $156.14 and $154.54, respectively, and my quarterly value level of $150.56, and reduce holdings on strength to my weekly risky level of $168.65, which was tested at the March 6 high. The all-time intraday high of $170.95 has been challenged and this month’s risky level is above the chart at $173.86.

iShares Transportation Average ETF (IYT)

Courtesy of MetaStock Xenith

The daily chart for the Transportation Sector ETF ($187.65 at March 6 open) shows that the ETF closed failed at its 50-day simple moving average of $193.89 at the Feb. 27 high. The horizontal levels are pivots or risky levels.

Investors should buy weakness to the 200-day simple moving average rising at $178.14. My semiannual and monthly pivots are $188.79 and $191.65, respectively. Investors should reduce holdings on strength to quarterly and annual risky levels of $194.07 and $204.61, respectively. The $204.61 level was tested at the Jan. 16 all-time intraday high of $206.73.

iShares Russell 2000 ETF (IWM)

Courtesy of MetaStock Xenith

The daily chart for the small caps ETF ($154.43 at the March 6 open) shows that the ETF has been moving back and forth around its 50-day simple moving average of $153.95. The horizontal lines are value levels, pivots and risky levels.

Investors should buy weakness to my semiannual value level of $144.99 which held at the low. My weekly pivot of $153.87 has been a magnet so far this week. Investors should reduce holdings on strength to my monthly and quarterly risky levels of $157.26 and $157.64, respectively. My annual risky level is well above the all-time intraday high of $160.62 set on Jan. 24.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.