The SPDR S&P 500 ETF (SPY) has a Bullish Chaikin Power Gauge ETF Rating and continues to lag the IWV (Russell 3000 ETF). The OB / OS Indicator is in an overbought position, while Chaikin Money Flow is positive as the fund traded at a new all-time high yesterday. SPY is above the long-term line and the Power Bar Ratio is bullish
Near-term support is in the zone between $330 and $340. There is no price based resistance with SPY at all-time highs. However, the case can be made that there is potential upside to $370, based on extensions, should the breakout hold.
The iShares Russell 2000 ETF (IWM) has a Bullish Chaikin Power Gauge ETF rating and is outperforming the SPY. Our OB / OS Indicator is moving higher in an oversold position and Chaikin Money Flow is bullish. IWM is above the long-term trend line and has a bullish Power Bar Ratio.
Support moves up to the $145 – $150 range (which is now a key level to hold) while the $160 – $170 is the zone of resistance on the upside. Should the small caps resolve this near-term consolidation to the upside, it would lend a breadth confirmation to the overall rally in equities.
The Invesco QQQ ETF (QQQ) has a Very Bullish Power Gauge ETF Rating and is leading the SPY, with the intensity of outperformance increasing of late. The OB / OS Indicator is in an overbought position and Chaikin Money Flow is bullish. The fund is above the rising long-term line and is well outside the upper volatility band. Here too, the Power Bar Ratio is bullish.
Take-Away: The uptrends from the March lows remain in place for all three of the main market ETFs. All exhibit strong money flow readings and bullish Power Bar ratios. Our bullish bias remains in place. QQQ is overbought and we do not like chasing that exposure at this time. The best course of action in the near-term is to ensure that a proper risk management system is in place in order to ensure that decisions are not being made emotionally when and if a pullback materializes.