Momentum Continues For The 5 ETFs That Track The Five Major U.S. Equity Averages

Richard Suttmeier

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Investors still have the opportunity to reduce holdings on strength to my risky levels. My advice remains the same. Reduce holdings by 50% on strength to risky levels.

Let’s say you invested $100,000 into the stock market and it’s now worth $300,000. If you reduce holdings by 50% you still have $150,000 in the stock market, more than you started with. Your original invested is now fully-protected with an extra $50,000 in the bank. This is a prudent investment strategy.

SPDR Dow Jones Industrial Average ETF (DIA)

Courtesy of MetaStock Xenith

The weekly chart for Diamonds ($223.16 on Sept. 18) is positive but overbought with the average above its five-week modified moving average of $219.40. The ETF is above its 200-week simple moving average or “reversion to the mean” at $180.75, last tested during the week of Feb. 12, 2016 when the average was $157.98. The 12x3x3 weekly slow stochastic reading is projected to rise to 80.74 this week moving above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my quarterly value level of $203.15. My weekly, semiannual and annual pivots are $223.34, $214.93 and $220.14, respectively. Sell strength to my monthly risky level of $225.32. My annual value level lags at $150.83.

SPDR S&P 500 ETF Trust (SPY)

Courtesy of MetaStock Xenith

The weekly chart for Spiders ($249.74 on Sept. 18) is positive with the ETF above its five-week modified moving average of $246.79. The 200-week simple moving average or “reversion to the mean” is $209.28. The 12x3x3 weekly slow stochastic reading is projected to rise to 76.51 this week up from 71.88 on Sept. 15.

Investment Strategies: Buy weakness to my quarterly value level of $231.82. My weekly pivot is $246.20. Sell strength to my semiannual, annual and monthly risky levels of $252.96, $253.37 and $257.09, respectively. My annual value level lags at $167.75.

PowerShares QQQ Trust ETF (QQQ)

Courtesy of MetaStock Xenith

The weekly chart for QQQ’s ($145.55 on Sept. 18) is positive but overbought with the ETF above its five-week modified moving average of $143.88. The 200-week simple moving average or “reversion to the mean” is $110.04. The 12x3x3 weekly stochastic reading is projected to rise to 80.93 this week moving above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my quarterly value level of $131.86. My annual pivot is $139.42 with weekly and semiannual pivots of $143.69 and $146.49, respectively. Sell strength to my monthly risky level of $156.52.

iShares Transportation Average ETF (IYT)

Courtesy of MetaStock Xenith

The weekly chart for transports ($171.72 on Sept. 18) is positive with the ETF above its five-week modified moving average of $168.51. The 200-week simple moving average or “reversion to the mean” at $149.50 last tested during the week of July 8, 2016 when the average was $132.90. The 12x3x3 weekly slow stochastic reading is projected to rise to 44.35 this week up from 39.23 on Sept. 15.

Investment Strategy: Buy weakness to my weekly and quarterly value levels of $162.97 and $158.89, respectively. My monthly pivot is $170.91. Sell strength to my semiannual and annual risky levels of $181.18 and $182.54, respectively.

iShares Russell 2000 ETF (IWM)

Courtesy of MetaStock Xenith

The weekly chart for the small caps ETF ($143.38 on Sept. 18) is positive with the ETF above its five-week modified moving average of $140.40. The 200-week simple moving average or “reversion to the mean” is $120.95, last tested during the week of July 1, 2016 when the average was $108.66. The 12x3x3 weekly slow stochastic reading is projected to rise to 58.10 this week up from 49.88 on Sept. 15.

Investment Strategy: Buy weakness to my weekly and quarterly value levels of $136.34 and $125.32, respectively. My monthly pivot is $142.44. Sell strength to my semiannual and annual risky levels of $144.61 and $154.33, respectively.

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