Notice how despite last week’s drop, DIA continues to push upwards. I still don’t think this is a good price level to buy at if you plan to hold for a year or more.
Technology stocks surged over 4% this week, which you can see in the weekly chart of QQQ above. I think QQQ will outperform relative to the DIA, so a possible trade would be to short DIA, and simultaneously buy QQQ.
See you next week!
Greetings! Let’s look at the Dow Jones chart since we talked about it last week.
Here’s the weekly chart of DIA, the index that tracks the Dow Jones index. Since we have seen confirmation of selling near the supply zone, now is a good time to sell or go short if you are a short term trader. I’m guessing we will drop to the low 240s in a month or so, which would be retracing half of the previous move up.
The lowest price in the last few months was about 215, with the highest near 260. So that’s a climb of 45 points. Half of that climb is about 22 points. 260 – 22 is around 240.
Hi everyone, welcome back!
Today I want to analyze the weekly chart of Dow Jones (DIA)
Last week I highlighted a possible weekly divergence on the indexes, and it looks like although Dow Jones has gone up 10 weeks in a row, there’s a much better risk-reward skewed towards the downside.
This represents a good short opportunity.
Notice how the RSI keeps getting lower despite the index making new highs. This displays weakening momentum. I think shorting near 265 with a stop loss near the 270 range is a good trade. Your profit exit would be in the 245-250 range, depending on how greedy you want to get with your risk-reward 🙂
See you next week.
It looks like we will have more upside next week because futures are up a lot as of 5:30 PM Eastern Time (Sunday night).
Here’s something interesting I noticed when I pulled up the weekly chart of SPY. Notice how the index made a higher high in 2018, but the RSI was lower when it made that new high.
As you can see today, the index continues to push closer and closer to all-time highs, yet the RSI is only around 57. I’m still sticking to my prediction that the market will be negative in 2019, and that we won’t reach new all-time highs this year. For the shorter term outlook, I suspect we will move a bit higher or stay around this price.
The last few weeks I’ve been quite bearish, but quite the opposite has happened. We are now approaching all-time highs, so I’m now neutral and don’t know which direction we will go.
Above are some levels to watch for in the weekly chart of SPY. 280-290 is the resistance zone where most people are looking to sell, and the major support level is near 250 which was 2018 February lows.
I’m neutral now, and my prediction is that we stay within the 250 to 280 zone for a while. In otherwords, I think we move sideways and stay rangebound.
See you next week!
Greetings, let’s look at some weekly charts.
Here’s the weekly chart of SPY. We still have some more upside to go before we reach strong overhead resistance in the 280-290 zone. Because of that, I think we could still go up another 10 points before starting our next leg lower. I don’t think we will reach new highs this year.
Here’s the weekly chart of QQQ. We’ve already reached the first resistance level near 175, so I suspect QQQ will drop before SPY drops (or drop more than SPY). Like SPY, I don’t think QQQ will reach new highs this year.
Good luck trading, see you next week!
Hi everyone, I hope you are having a great weekend and can maybe enjoy some football (if you watch that is.)
In terms of stocks, there isn’t much to update since I still think we will drop and retest the lows we made in December. For QQQ, that would be around 145, SPY near 235, and DIA near 220. Of course this process will likely take a while (probably a few months).
Above is the weekly chart of SPY. I suspect we will retest the price range highlighted in the rectangle above. That price range is about 235-240. Of course, we could easily head towards 280 now, but I suspect we won’t get much higher than that in 2019.