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
SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)
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)
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)
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)
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)
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.