Diamonds, Spiders, QQQs, Transports And Russell 2000 ETFs Have Formed Trading Ranges

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

The Diamonds ETF ended August above its annual pivot at $257.94 but is below its 50-day simple moving average at $265.68.

The Spiders ETF ended last week above its annual pivot at $285.86 but is below its semiannual pivot at $294.72.

The QQQ ETF ended last week below its semiannual pivot at $188.63 and below its 50-day simple moving average at $188.77.

The Transports ETF is below its 200-day and 50-day simple moving averages at $184.46 and $185.44, respectively.

The Russell 2000 ETF is below its 200-day and 50-day simple moving averages at $150.78 and $152.21, respectively.

Here’s Today’s Scorecard

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

Daily Chart for Diamonds Courtesy of Refinitiv XENITH

The Diamonds ETF ended August 21.7% above its 2018 low of $216.97 set on Dec. 26 and is 3.6% below its all-time intraday high of $273.99 set on July 16.

Diamonds has a negative weekly chart if the ETF ends this week below its five-week modified moving average at $262.74 with its 12x3x3 weekly slow stochastic reading slipping to 57.28 last week down from 64.40 on Aug. 23. Its annual pivot is $257.94 with its semiannual pivot at $272.78 and quarterly and monthly risky levels at $285.35 and $287.97, respectively.

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

Daily Charts For Spiders Courtesy of Refinitiv XENITH

The Spiders ETF ended August 25.1% above its Dec. 26 low of $233.76 and is 3.2% below its all-time intraday high of $302.23 set on July 26.

Spiders has a negative weekly chart if this week’s close is below its five-week MMA at $291.25 with its 12x3x3 weekly slow stochastic reading slipping to 61.98 last week down from 68.51 on Aug. 23. The annual pivot is $285.86 with a semiannual pivot at $294.72 and quarterly and monthly risky levels at $305.22 and $319.09, respectively.

PowerShares QQQ Trust ETF (NASDAQ:QQQ)

Daily Chart for QQQ Courtesy of Refinitiv XENITH

The QQQs ETF ended August 30.7% above its 2018 low of $143.46 set on Dec. 24 and is 4.1% below its all-time intraday high of $195.55 set on July 26.

QQQ has a negative weekly chart given a close on Friday below its five-week MMA at $186.49 with its 12x3x3 weekly slow stochastic reading slipping to 66.42 last week down from 71.31 on Aug. 23. The annual value level is $169.27 with a semiannual pivot at 188.63 and its quarterly and monthly risky levels at $201.51 and $209.60, respectively.

iShares Transportation Average ETF (NYSEARCA:IYT)

Daily Chart for Transports ETF Courtesy of Refinitiv XENITH

IYT ended August 17.6% above its 2018 low of $155.24 set on Dec. 24. The ETF is in correction territory 12.9% below its all-time intraday high of $209.43 set on Sept. 14. The 2019 high of $200.42 was set on April 24.

The weekly chart for IYT is negative with the ETF below its five-week MMA at $182.82 with its 12x3x3 weekly slow stochastic reading slipping to 37.34 last week down from 44.80 on Aug. 23. I show semiannual, annual, quarterly and monthly risky levels at $193.47, $196.35, $200.49 and $206.83, respectively.

iShares Russell 2000 ETF (NYSEARCA:IWM)

Daily Chart for Russell 2000 ETF Courtesy of Refinitiv XENITH

IWM ended August 18.3% above its 2018 low of $125.81 set on Dec. 26 and in correction territory 14.2% below its all-time intraday high of $173.39 set on Aug. 31. The 2019 high is $161.11 set on May 6.

IWM has a negative weekly chart with the ETF below its five-week MMA at $149.80. Its 12x3x3 weekly slow stochastic reading slipped to 35.23 last week down from 42.57 on Aug. 23. Semiannual, annual, quarterly and monthly risky levels are $156.14, $157.49, $166.36 and $171.17, respectively.

How to use my value levels and risky levels:

Value levels and risky levels are based upon the last nine weekly, monthly, quarterly, semiannual and annual closes. The first set of levels was based upon the closes on Dec. 31. The original annual level remains in play. The weekly level changes each week. The monthly level was changed at the end of each month, the latest on Aug. 30. The quarterly level was changed at the end of June. My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility investors should buy on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before its time horizon expires.

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.”

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.