Diamonds, Spiders, QQQ Remain Poised For New All-Time Highs

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

The Diamonds ETF is above this week’s pivot at $261.35 with its all-time intraday high at $269.28 set on Oct. 3.

The Spiders ETF is above this week’s pivot at $288.38 with its all-time intraday high at $293.94 set on Sept. 21.

The QQQ ETF is just below this week’s pivot at $186.02 with its all-time intraday high at $187.53 set on Oct. 1.

The transports ETF tested its annual risky level at $196.35 last week with its all-time intraday high at $209.43 set on Sept. 14.

The Russell 2000 ETF has been trading around its annual pivot at $157.49 since Feb. 20 with its quarterly risky level at $166.04.

Today, I show the daily charts with their key technical levels.

Here’s Today’s Scorecard

scorecard Equity ETFs

Please ignore any media outlets that tout new all-time closing highs! This is totally misleading and an outdated analysis since the early 1980s.

A warning is starting to show on weekly charts for Spiders and QQQ as their 12x3x3 weekly slow stochastic readings are above 90.00 which I describe as an “inflating parabolic bubble.” Diamonds and transports are overbought with readings above 80.00. The Russell 2000 has a reading that has fallen just below 80.00.

How to use 12x3x3 Weekly Slow Stochastic Readings:

My choice of using 12x3x3 weekly slow stochastic readings was based upon back-testing many methods of reading share price momentum with the objective of finding the combination that resulted in the fewest false signals. I did this following the stock market crash of 1987, so I have been happy with the results for more than 30 years. The stochastic reading covers the last 12 weeks of highs, lows and closes for the stock. There is a raw calculation of the differences between the highest high and lowest low versus the closes. These levels are modified to a fast reading and a slow reading and I found that the slow reading worked the best. The stochastic reading scales between 00.00 and 100.00, with readings above 80.00 considered overbought and readings below 20.00 considered oversold. Recently, I noted that stocks tend to peak and decline 10% to 20% and more shortly after a reading rises above 90.00, so I call that an “inflating parabolic bubble” as a bubble always pops. I also call a reading below 10.00 as being “too cheap to ignore.”

SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)

Daily Chart For Diamonds Courtesy of Refinitiv XENITH

The Diamonds ETF is in bull market territory 21.7% above its 2018 low of $216.97 set on Dec. 26 and is 1.9% below its all-time intraday high of $269.28 set on Oct. 3. Remember that the Dec. 26 low was a “key reversal” day as the close was above the Dec. 24 high. My annual, monthly and semiannual value levels are $257.94, $255.08 and $243.47, respectively, with a weekly pivot at $261.35 and quarterly risky level at $279.04, which would be a new high.

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

Daily Chart For Spiders Courtesy of Refinitiv XENITH

The Spiders ETF is in bull market territory 24.2% above its Dec. 26 low of $233.76 and is 1.3% below its all-time intraday high of $293.94 on Sept. 21. Remember that Dec. 26 was a “key reversal” day as the close was above the Dec. 24 high. My annual, monthly and semiannual value levels are $285.86, $272.17 and $266.14, respectively, with a weekly pivot at $288.38 and quarterly risky level at $297.56, which would be a new high.

Invesco QQQ ETF (NASDAQ:QQQ)

Daily Chart For QQQ Courtesy of Refinitiv XENITH

The QQQ ETF is in bull market territory 29.5% above its 2018 low of $143.46 on Dec. 24. QQQ is just 0.9% below its all-time intraday high of $187.53 set on Oct. 1. My monthly, annual and semiannual value levels are $171.67, $169.27 and $167.53, respectively, with a weekly pivot at $186.02 and quarterly risky level at $194.29, which would be a new high.

iShares Transportation Average ETF (NYSEARCA:IYT)

Daily Chart For Transports Courtesy of Refinitiv XENITH

IYT is 26.5% above its 2018 low of $155.24 set on Dec. 24. The ETF is 6.2% below its all-time intraday high of $209.43 set on Sept. 14. My monthly and semiannual value levels are $177.59 and $159.63, with annual and quarterly risky levels at $196.35 and $204.78, respectively.

iShares Russell 2000 ETF (NYSEARCA:IWM)

Daily Chart For Russell 2000 Courtesy of Refinitiv XENITH

IWM is 25.3% above its 2018 low of $125.81 set on Dec. 26 and is 9.1% below its all-time intraday high of $173.39 set on Aug. 31. My semiannual and monthly value levels are $149.77 and $143.05, with my annual pivot at $157.49 and my quarterly risky level at $166.03.

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.