USA Stock Indexes: Week End Update

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I'm going to review the 4 major stock indexes to compare them and see what the status of the prices are for the week ended.  Instead of the index values, I will review them via the ETFs: SPY, DIA, QQQQ, IWM, which represent the S&P 500, DJIA 30, NAS 100, and Russell 2000. I have already reviewed the S&P 500, SPX, and the US Dollar Index, USDX, for the current week ended, in the previous post, so the SPY review will basically be a repeat. At the end of this post, I will have a summary to review the comparative price strengths and weaknesses of each of these 4 equity index ETFs.

The storyline is the IWM is leading this rally off the February 2010 lows and has not only regained the 2010 highs but exceeded them.  QQQQ is the second best performing index, followed by SPY and DIA.

SPY: Intermediate-Term Bear Market Continues

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, still indicates an ongoing bear market for the SPY, the S&P 500 ETF. That is, the 25d sma is less than the 50d sma. This is the first such bear market signal since July 2009, occurring on February 9, and only the second one since the March 2009 bottom. The 2010 pullback, correction has created price damage that can only be repaired through sustained higher prices.

Resistance and Support The current close of 114.25, the highest yellow horizontal line, is now at recent resistance from the sideways trading in January. The sideways trading resistance in November and December 2009 was overcome on March 1. SPY had entered that resistance area on February 16. The resistance from the October 2009 highs had been overcome even earlier. Regaining the Janaury 19, 2010 closing high of 115.06 is now possible.

Moving Averages SPY regained the 50d simple moving average, an indicator of price strength, on March 1 and is now well above. The 25d sma bottomed on February 26 and is now ascending at an increasing rate, another bullish sign. The 50d, 100d, and 200d sma's are all ascending, which is a postive sign. Most bothersome is the 25d sma breaking down through the 50d on February 9 and the 100d sma on February 23. However, the 25d is now ascending towards both. SPY closed above the 100d sma on February 25 and continues above. Overall, few indications of price weakness persist, the bull signals increased in frequency and intensity this week.

Trend Lines I have included two yellow uptrend lines. The higher uptrend line, a faster rate of price ascent, is from the March 9, 2009 closing low of 68.11 up through the January 29, 2010 closing low of 107.39. I am using this as a benchmark to monitor SPY price performance. The SPY has regained and stayed above this trendline. The second, lower yellow uptrend line, a slightly slower rate of price ascent, is a more traditional trendline. This trendline is from the March 9. 2009 closing low of 68.11 up through the February 8, 2010 closing low of 105.89. The February 8 closing low has been the bottom of this 2010 pullback to-date. SPY has remained above this trendline since bouncing up above on February 9. Whether SPY can continue above these trendlines, these rates of price ascent, will determine whether a bull market signal is generated sooner.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. SPY is well above this 106.77 signal with a current close of 114.25, which is the highest yellow horizontal line. The middle yellow horizontal line is the 12-31-09 year end price of 111.44.

Conclusion SPY has rallied significantly off the lows of February, has broken out upside, and is near the January 19, 2010 closing high of 114.25. There has been uncertainty, but not fear. The weakening and leveling of the US Dollar recently has assisted.  Therefore, I don't foresee a huge drop in SPY, excluding an international crisis such as a military event or sovereign debt crisis. SPY has many companies with international sales, hence the US Dollar does impact stock price.  The bounce upwards needs to continue to generate higher prices that will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The intermediate-term trend is still bearish, with very encouraging bullish signals. The long-term trend is still bullish.

DIA: Intermediate-Term Bear Market Continues

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, still indicates an ongoing bear market for the DIA, the Dow Jones Industrial Average 30 ETF. That is, the 25d sma is less than the 50d sma. This is the first such bear market signal since July 2009, occurring on February 4, and only the second one since the March 9, 2009 bottom. The 2010 pullback, correction has created price damage that can only be repaired through sustained higher prices.

Resistance and Support The current close of 105.76, the highest yellow horizontal line, is now at recent resistance from the sideways trading in January. The sideways trading resistance in November and December 2009 was overcome on March 5. DIA had entered that resistance area on February 16. The resistance from the October 2009 highs had been overcome even earlier. Regaining the Janaury 19, 2010 closing high of 107.17 is now possible.

Moving Averages DIA regained the 50d simple moving average, an indicator of price strength, on March 1 and is now well above. The 25d sma bottomed on February 26 and is now ascending at an increasing rate, another bullish sign. The 50d, 100d, and 200d sma's are all ascending, which is a postive sign. Most bothersome is the 25d sma breaking down through the 50d on February 4 and the 100d sma on February 24. However, the 25d is now ascending towards both. DIA closed above the 100d sma on February 26 and continues above. Overall, few indications of price weakness persist, the bull signals increased in frequency and intensity this week.

Trend Lines I have included two yellow uptrend lines. The higher uptrend line, a faster rate of price ascent, is from the March 9, 2009 closing low of 65.44 up through the January 29, 2010 closing low of 100.55. I am using this as a benchmark to monitor DIA price performance. The DIA has regained and stayed above this trendline. The second, lower yellow uptrend line, a slightly slower rate of price ascent, is a more traditional trendline. This trendline is from the March 9. 2009 closing low of 65.44 up through the February 8, 2010 closing low of 99.22. The February 8 closing low has been the bottom of this 2010 pullback to-date. DIA has remained above this trendline since bouncing up above on February 9. Whether DIA can continue above these trendlines, these rates of price ascent, will determine whether a bull market signal is generated sooner.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. DIA is well above this 99.52 signal with a current close of 105.76, which is the highest yellow horizontal line. The middle yellow horizontal line is the 12-31-09 year end price of 104.07.

Conclusion DIA has rallied significantly off the lows of February, has broken out upside, and is near the January 19, 2010 closing high of 107.17. There has been uncertainty, but not fear. The weakening and leveling of the US Dollar recently has assisted. Therefore, I don't foresee a huge drop in DIA, excluding an international crisis such as a military event or sovereign debt crisis. DIA has many companies with international sales, hence the US Dollar does impact stock price. The bounce upwards needs to continue to generate higher prices that will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The intermediate-term trend is still bearish, with very encouraging bullish signals. The long-term trend is still bullish.

QQQQ: Intermediate-Term Bear Market Continues

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, still indicates an ongoing bear market for the QQQQ, the NAS 100 ETF, which is technology weighted. That is, the 25d sma is less than the 50d sma. This is the first such bear market signal since the March 2009 bottom, occurring on February 10. What a bull run for the mighty QQQQs! This reveals the depth of the current pullback. The 2010 pullback, correction has created price damage that can only be repaired through sustained higher prices.

Resistance and Support The current close of 46.44, the highest yellow horizontal line, is now above almost all resistance except the January 8 and 19 closing highs.  QQQQ is sitting on the support of the January 4 and 5 closing highs.  The recent resistance from the sideways trading in January and February has been overcome. The sideways trading resistance in November and December 2009 has also been overcome.  The resistance from the October 2009 highs had been overcome even earlier. Regaining the Janaury 19, 2010 closing high of 46.59 is now just above.

Moving Averages QQQQ regained the 50d simple moving average, an indicator of price strength, on March 1 and is now well above. The 25d sma bottomed on February 26 and is now ascending at an increasing rate, another bullish sign. The 50d, 100d, and 200d sma's are all ascending, which is a postive sign. The 25d sma did break down through the 50d on February 10 and the 100d sma on February 26. However, the 25d sma did bottom on February 26 and then regain the 100d sma on March 5, a bullish sign.  The 25d sma is also now ascending towards the 50d sma. QQQQ closed above the 100d sma on February 16 and the 50d sma on March 1 plus continues above both. Overall, few indications of price weakness persist, the bull signals increased in frequency and intensity this week.

Trend Lines I have included two yellow uptrend lines. The higher uptrend line, a faster rate of price ascent, is from the March 9, 2009 closing low of 25.74 up through the January 29, 2010 closing low of 42.63. I am using this as a benchmark to monitor QQQQ price performance. The QQQQ has regained and stayed above this trendline. The second, lower yellow uptrend line, a slightly slower rate of price ascent, is a more traditional trendline. This trendline is from the March 9. 2009 closing low of 25.74 up through the February 4, 2010 closing low of 42.62. The February 4 closing low has been the bottom of this 2010 pullback to-date. QQQQ has remained above this trendline since bouncing up above on February 9. Whether QQQQ can continue above these trendlines, these rates of price ascent, will determine whether a bull market signal is generated sooner.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. QQQQ is well above this 42.40 signal with a current close of 46.44, which is the highest yellow horizontal line. The middle yellow horizontal line is the 12-31-09 year end price of 45.75.

Conclusion QQQQ has rallied significantly off the lows of February, has broken out upside, and is near the January 19, 2010 closing high of 46.59. There has been uncertainty, but not fear. The weakening and leveling of the US Dollar recently has assisted. Therefore, I don't foresee a huge drop in QQQQ, excluding an international crisis such as a military event or sovereign debt crisis. QQQQ has many companies with international sales, hence the US Dollar does impact stock price. The bounce upwards needs to continue to generate higher prices that will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The intermediate-term trend is still bearish, with very encouraging bullish signals. The long-term trend is still bullish.

IWM: Intermediate-Term Bear Market Continues

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, still indicates an ongoing bear market for the IWM, the Russell 2000 ETF. That is, the 25d sma is less than the 50d sma. This is the second such bear market signal since July 2009, occurring on February 16, and the third such signal since the March 2009 bottom. This reveals the depth of the current pullback. The 2010 pullback, correction has created price damage that can only be repaired through sustained higher prices.

Resistance and Support The current close of 66.62, the highest yellow horizontal line, is now above all resistance! IWM is at the bottoming process and sideways trading that occurred in July 2008.  The current closing price is also at the beginning of the precipitous decline that began in late September and early October 2008.  The Janaury 19, 2010 closing high of 64.85 was regained, and exceeded, on March 3.

Moving Averages IWM regained the 50d simple moving average, an indicator of price strength, on February 25 and is now well above. The 25d sma bottomed on February 26 and is now ascending at an increasing rate, another bullish sign. The 50d, 100d, and 200d sma's are all ascending, which is a postive sign. The 25d sma did break down through the 50d on February 16 but has not broken through the 100d sma.  Actually, the 25d sma is now ascending above the 100d sma.  The 25d sma is also now ascending towards the 50d sma. IWM closed above the 100d sma on February 12 and the 50d sma on February 16 plus continues above both. Overall, few indications of price weakness persist, the bull signals increased in frequency and intensity this week.

Trend Lines I have included two yellow uptrend lines. The higher uptrend line, a faster rate of price ascent, is from the March 9, 2009 closing low of 34.39 up through the January 29, 2010 closing low of 60.11. I am using this as a benchmark to monitor IWM price performance. The IWM has regained and stayed above this trendline. The second, lower yellow uptrend line, a slightly slower rate of price ascent, is a more traditional trendline. This trendline is from the March 9. 2009 closing low of 34.39 up through the February 8, 2010 closing low of 58.68. The February 8closing low has been the bottom of this 2010 pullback to-date. IWM has remained above this trendline since bouncing up above on February 9. Whether IWM can continue above these trendlines, these rates of price ascent, will determine whether a bull market signal is generated sooner.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. QQQQ is well above this 59.82 signal with a current close of 66.62, which is the highest yellow horizontal line. The middle yellow horizontal line is the 12-31-09 year end price of 62.44.

Conclusion IWM has not only rallied from the lows of February, but has broken out upside and exceeded the January 19, 2010 closing high of 64.85! IWM has set new 2010 highs for the last 3 days!. The weakening and leveling of the US Dollar recently has assisted. However, IWM, the Ruseell 2000 is not as impacted by a strengthening or strong dollar as is SPY, DIA, and QQQQ.  This is because the IWM consists of many mid and small cap domestic USA companies, unaffected by the US Dollar and currency conversions.  Therefore, I don't foresee a huge drop in IWM, excluding an international crisis such as a military event or sovereign debt crisis. The bounce upwards needs to continue to generate higher prices that will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The intermediate-term trend is still bearish, with very encouraging bullish signals. The long-term trend is still bullish.

Summary

Current Percentage Gain (Loss) from 2010 Closing High

IWM has the least amount of loss since the January 19 highs and DIA the most.

IWM: Mar 5 now $66.62 less Jan 19 high $64.85 = $1.77 / $64.85 = 2.73%

QQQQ: Mar 5 now $46.44 less Jan 19 high $46.59 = ($0.15) / $46.59 = (0.32%)

SPY: Mar 5 now $114.25 less Jan 19 high $115.06 = ($0.81) / $115.06 = (0.70%)

DIA: Mar 5 now $105.76 less Jan 19 high $107.17 = ($1.41) / $107.17 = (1.31%)

Current Percentage Gain (Loss) from 2010 Closing Low

IWM has gained the most from the February lows and DIA the least.

IWM: Mar 5 now $66.62 less Feb 8 low $58.68 = $7.94 / $58.68 = 13.53%

QQQQ: Mar 5 now $46.44 less Feb 4 low $42.62 = $3.82 / $42.62 = 8.96%

SPY: Mar 5 now $114.25 less Feb 8 low $105.89 = $8.36 / $105.89 = 7.89%

DIA: Mar 5 now $105.76 less Feb 8 low $99.22 = $6.54 / $99.22 = 6.59%

By these measures, IWM is clearly the strongest of the indexes, as it was when I last reviewed them on February 20.  As noted previously, IWM is not as affected by the movements in the US Dollar.  This is also interesting because IWM broke down from mid-November through mid-December and lagged SPY, DIA, and QQQQ in price performance.

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