The 5 ETFs That Track The Five Major U.S. Equity Averages Have Strong Technical Momentum

Richard Suttmeier

SPDR Dow Jones Industrial Average ETF (DIA)

Courtesy of MetaStock Xenith

The weekly chart for Diamonds ($223.82 on Sept. 29) is positive but overbought with the average above its five-week modified moving average of $220.29. The ETF is above its 200-week simple moving average or “reversion to the mean” at $181.06, last tested during the week of Feb. 12, 2016 when the average was $157.98. The 12x3x3 weekly slow stochastic reading rose to 85.78 last week up from 80.22 on Sept. 22 moving further above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my semiannual pivot of $214.93. My annual pivot is $220.14. Sell strength to my monthly and quarterly risky levels of $231.08 and $232.31, respectively. My annual value level lags at $150.83.

SPDR S&P 500 ETF Trust (SPY)

Courtesy of MetaStock Xenith

The weekly chart for Spiders ($251.23 on Sept. 29) is positive but overbought with the ETF above its five-week modified moving average of $247.63. The 200-week simple moving average or “reversion to the mean” is $209.63. The 12x3x3 weekly slow stochastic reading rose to 81.83 last week up from 76.17 on Sept. 22 moving above the overbought threshold of 80.00.

Investment Strategies: Buy weakness to my weekly value level of $247.57. Sell strength to my semiannual and annual risky levels of $252.96 and $253.37, respectively. My monthly and quarterly risky levels are $259.19 and $261.42, respectively. My annual value level lags at $167.75.

PowerShares QQQ Trust ETF (QQQ)

Courtesy of MetaStock Xenith

The weekly chart for QQQ’s ($145.45 on Sept. 29) is positive but overbought with the ETF above its five-week modified moving average of $144.00. The 200-week simple moving average or “reversion to the mean” is $110.33. The 12x3x3 weekly stochastic reading rose to 82.17 last week up from 79.66 on Sept. 22, moving above the overbought threshold on 80.00.

Investment Strategy: Buy weakness to my annual pivot of $139.42. My weekly and semiannual pivots are $144.53 and $146.49, respectively. Sell strength to my quarterly and monthly risky levels of $148.62 and $154.91, respectively.

iShares Transportation Average ETF (IYT)

Courtesy of MetaStock Xenith

The weekly chart for the Transportation Sector ETF ($178.42 on Sept. 29) is positive with the ETF above its five-week modified moving average of $171.03. The 200-week simple moving average is the “reversion to the mean” at $149.76, last tested during the week of July 8, 2016 when the average was $132.92. The 12x3x3 weekly slow stochastic reading rose to 57.62 last week up from 47.15 on Sept. 22.

Investment Strategy: Buy weakness to my quarterly and monthly value levels of $173.93 and $173.56, respectively. Sell strength to my annual and semiannual risky levels of $182.54 and $193.18, respectively.

iShares Russell 2000 ETF (IWM)

Courtesy of MetaStock Xenith

The weekly chart for the small caps ETF ($148.18 on Sept. 29) is positive with the ETF above its five-week modified moving average of $142.10. The 200-week simple moving average or “reversion to the mean” is $121.13, last tested during the week of July 1, 2016 when the average was $108.66. The 12x3x3 weekly slow stochastic reading rose to 69.84 last week up from 58.66 on Sept. 22.

Investment Strategy: Buy weakness to my monthly value level of $146.82. Sell strength to my quarterly, semiannual and annual risky levels of $151.26, $152.54 and $154.33, respectively.

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