Taking a look at index and sector ETF charts, most consolidated during the past week. Until price breaks out of consolidation, neither bulls nor bears hold the advantage. At the same time, the dominant trend is still higher, and support levels are generally closer to current price than are resistance levels.
- SPY consolidated under the 95.00 level this week. Price has support around the 90.00 area in the form of the 50 and 200 day moving averages, which are about to cross in a bullish fashion. Last week's high was 96.11. A break above that level should squeeze the shorts.
- QQQQ has been trading in a ascending channel. Drawing fibonacci retracements from the September high to the double bottom lows, we can see price consolidating at the 50% retracement level. Price could find support at the ascending trendline, the rising 50 day moving average, at the 38.2% retracement level, or around 33.00. In other words, there are a number of support levels below the current level, although they are spread out. A convincing break above 37.25 would signal another leg higher.
- IYT: The transports show a big spike in volume on Friday. I'm not sure what that means. Price is stuck below the 61.50 area, and a break above that level would be a bullish signal. The rising 50 day moving average could provide support.
- XLI: The industrials are still setting higher lows and higher highs. Price sits above the 200 day moving average, with the rising 50 day about to cross. The bulls definitely hold the advantage here for now.
