Monday, August 17, 2009
On the daily chart, note that prices consolidated last week. This is the best possible situation for the bulls. However, the MACD is moving into a situation where it might give a sell signal. This isn't fatal -- in fact, the bull should welcome a 5%-10% sell-off right now. Prices are still using the EMAs for technical support rather than resistance. However -- notice the 200 day EMA is not moving in a positive direction. That is an extremely important long-term development.
A lot of the commentary for the SPYs applies to the QQQQs. The big difference in the chart is the MACD has already given a sell signal. As the QQQQs have led the rally higher this is an important development.
The IWMs are somewhere between the SPYs and the QQQQs. They have given a MACD sell signal, but the indicator has not progresssed as far as the QQQQs indicator. Still -- and like the other two major averages -- this average has advances strongly over the last few months and could use a sell off.
I have included fibonacci levels in the event of a pull back.