The 5 Major Equity ETFs On The Rise Expecting Positive Second Quarter Earnings

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Includes: DIA, IWM, IYT, QQQ, SPY
by: Richard Suttmeier
Summary

The Diamonds, Spiders and Transportation ETFs peaked in January but held key levels for first quarter earnings.

The QQQ and small cap ETFs also set tradeable highs in January and held key levels for first quarter earnings but continued to higher highs.

Since April, the tech-heavy QQQ’s and Russell 2000 ETFs have become the market leaders.

Key levels held as July began following the pattern of performing well during earnings season.

Today’s Market Cross-Currents

The major money center and super regional banks began July in correction territory, but key levels held in anticipation that second quarter earnings will beat expectation that begin with the banks on Friday, July 13.

The housing market remains stalled at 50% of potential with the major homebuilder stocks in bear market territory. Investors remain concerned that a Trade War is evident as higher tariffs spread.

The Tax Cut and Jobs Act has Main Street worried about State & Local Income Taxes (SALT) and property taxes.

The Federal Reserve policy of rewinding its balance sheet has been ignored at the peril of investors as July begins a three month drain of $40 billion per month.

Today’s Equity ETF Scorecard

Scorecard For Equity ETFs SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)

Daily Chart For Diamonds Courtesy of MetaStock Xenith

The daily chart shows how Diamonds held its 200-day simple moving average of $234.16 on April 2 just before the earnings parade began for the first quarter of 2018. Notice how the 200-day simple moving average provided a floor for the second quarter earnings season holding between June 25 and July 6. Diamonds are above my semiannual and annual pivots of $246.52 and $243.29, respectively, which indicates upside potential to my monthly and quarterly risky levels of $258.47 and $264.99, respectively.

SPDR S&P 500 ETF Trust (NYSEARCA:SPY)

Daily Chart For Spiders Courtesy of MetaStock Xenith

The daily chart shows how Spiders held its 200-day simple moving average of $258.67 on April 2 just before the first quarter earnings season began. Notice my semiannual pivot of $270.84 for the second half held as July began. This targeted my annual pivot of $276.34 which was penetrated and held as Monday began. The upside now is to my monthly and quarterly risky levels of $282.09 and $288.57, respectively.

PowerShares QQQ Trust ETF (NASDAQ:QQQ)

Daily Chart For QQQs Courtesy of MetaStock Xenith

The daily chart shows how QQQs held its annual pivot of $156.14 as April began setting the stage for a positive first quarter earnings period for large momentum stocks. QQQ’s began July above my second half value level of $169.40 which targets my monthly and quarterly risky levels of $177.17 and $183.98, respectively.

iShares Transportation Average ETF (NYSEARCA:IYT)

Daily Chart For Transports ETF Courtesy of MetaStock Xenith

The daily chart shows how the transports ETF held above its 200-day simple moving average of $180.52 on April 6 just before the earnings parade began for the first quarter of 2018. Notice how the 200-day simple moving average provided a magnet for the second quarter earnings season between June 28 and July 6. Transports are above my second half semiannual value level of $181.19 with my monthly and annual risky levels at $202.91 and $204.61, respectively.

iShares Russell 2000 ETF (NYSEARCA:IWM)

Daily Chart For The Russel 2000 ETF Courtesy of MetaStock Xenith

The daily chart shows how the Russell 2000 ETF held its 200-day simple moving average of $147.92 on April 2 setting the stage for a positive first quarter earnings period for small cap stocks. The small cap ETF began July around my monthly pivot for July at $163.69. The ETF moved above my annual pivot of $165.04 which indicates upside to my quarterly risky level of $177.79. My semiannual value level is $154.05.

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.