There is not much change in the overall picture. Bond yields are in uptrends, Treasuries are in downtrends, the Dollar is weak, Gold is strong, Oil remains strong and Stocks are Strong. Even though some of these trends flatted over the last few days, they remain largely intact. The 10-year Treasury Yield ($TNX) remains in an uptrend as it bounces off support in the 34 area (3.4%). This level was tested last week and again this week. A break below these lows would be short-term bearish for yields and bullish for bonds.
The US Dollar Fund (UUP) is holding support in the 21.75 area with three tests over the last two weeks. Support in this area also stems from the 62% retracement. At this point, the onus remains on the bulls to prove the bears wrong. The bigger trend for the Dollar is down and the failure at 21.92 resistance looms large. A break above this level is needed to trigger a short-term uptrend. Further strength in treasury yields could help the greenback.
There is no change on the daily SPY chart. The overall trend is up, SPY is short-term overbought and at potential resistance from the February highs. The ETF continues its stall with five indecisive candlesticks in the last five days. We have seen strings of indecisive candlesticks before – namely in late December. At this point, indecision can be interpreted has neutral at worst. After all, this is indecision within an uptrend. Some sort of downside move is needed to actually forge a reversal. A move below 131.9 would provide the first sign of weakness that could lead to a deeper pullback.
There is not much change on the 60-minute chart. The uptrend is clear as the ETF shows a steady progression of gaps, higher highs and higher lows since mid March. The last gap above 132 marks the first important support zone to watch. A move below this level would fill the gap and increase the chances of a deeper pullback. RSI remains in bull mode as it holds above 50. A move below 35 would turn short-term momentum bearish.
Key Economic Reports/Events:
Wed - Apr 06 - 07:00 - MBA Mortgage Index
Wed - Apr 06 - 10:30 - Oil Inventories
Thu - Apr 07 - 08:30 - Jobless Claims
Thu - Apr 07 - 15:00 - Consumer Credit
Fri - Apr 08 - 10:00 - Wholesale Inventories
Charts of Interest: Tuesday and Thursday in separate post.
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This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes to trading our own accounts. First, it is the only way to really learn. Second, we are the only ones responsible for our decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. Among other things, this includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.
There is no change on the daily SPY chart. The overall trend is up, SPY is short-term overbought and at potential resistance from the February highs. The ETF continues its stall with five indecisive candlesticks in the last five days. We have seen strings of indecisive candlesticks before – namely in late December. At this point, indecision can be interpreted has neutral at worst. After all, this is indecision within an uptrend. Some sort of downside move is needed to actually forge a reversal. A move below 131.9 would provide the first sign of weakness that could lead to a deeper pullback.
There is not much change on the 60-minute chart. The uptrend is clear as the ETF shows a steady progression of gaps, higher highs and higher lows since mid March. The last gap above 132 marks the first important support zone to watch. A move below this level would fill the gap and increase the chances of a deeper pullback. RSI remains in bull mode as it holds above 50. A move below 35 would turn short-term momentum bearish.
Key Economic Reports/Events:
Wed - Apr 06 - 07:00 - MBA Mortgage Index
Wed - Apr 06 - 10:30 - Oil Inventories
Thu - Apr 07 - 08:30 - Jobless Claims
Thu - Apr 07 - 15:00 - Consumer Credit
Fri - Apr 08 - 10:00 - Wholesale Inventories
Charts of Interest: Tuesday and Thursday in separate post.
-----------------------------------------------------------------------------
This commentary and charts-of-interest are designed to stimulate thinking. This analysis is not a recommendation to buy, sell, hold or sell short any security (stock ETF or otherwise). We all need to think for ourselves when it comes to trading our own accounts. First, it is the only way to really learn. Second, we are the only ones responsible for our decisions. Think of these charts as food for further analysis. Before making a trade, it is important to have a plan. Plan the trade and trade the plan. Among other things, this includes setting a trigger level, a target area and a stop-loss level. It is also important to plan for three possible price movements: advance, decline or sideways. Have a plan for all three scenarios BEFORE making the trade. Consider possible holding times. And finally, look at overall market conditions and sector/industry performance.
About the author:
Arthur Hill, CMT, is the Chief Technical Strategist at TrendInvestorPro.com. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed market technician. Arthur has written articles for numerous financial publications including Barrons and Stocks & Commodities Magazine. In addition to his Chartered Market Technician (CMT) designation, he holds an MBA from the Cass Business School at City University in London.
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