The SPDR Dow Jones Industrial Average ETF (DIA - Get Report) , the SPDR S&P 500 ETF Trust (SPY - Get Report) and the PowerShares QQQ Trust ETF Series 1 (QQQ - Get Report) represent the Dow Jones Industrial Average, the S&P 500 and the Nasdaq 100. My call is to buy weakness to monthly and annual value levels, which are shown on the weekly charts below.

Wall Street economists are confused as to what the Federal Reserve will do next. Some say, "one and done." Others call for additional rate cuts. We know that President Trump wanted a 50-basis point cut with guidance of more to come. This did not happen, and stocks plunged on Wednesday.

On Thursday, stocks were in recovery mode, then came the news of additional tariffs on Chinese goods. This caused a significant stock market reversal that is shown on the weekly charts below.

Here is a summary of the factors moving the markets today.

The Weekly Chart for Diamonds

Courtesy of Refinitiv XENITH

The weekly chart for Diamonds will be downgraded to neutral with the ETF below its 5-week modified moving average at $266.53. DIA is well above its 200-week simple moving average or "reversion to the mean" at $219.76, which is the downside risk if monthly and annual value levels fail to hold at $259.76 and $257.84, respectively. I currently do not show value levels below these key levels. The key to the downside came after its semiannual pivot at $272.78 failed to hold. DIA set its all-time intraday high of $273.99 on July 18. The 12x3x3 weekly slow stochastic reading is projected to end this week slipping to 86.20 down from 88.72 on July 26. If this reading falls below the overbought threshold of 80.00, with the ETF staying below its five-week MMA, the weekly chart will be downgraded to negative.

Trading Strategy: Traders can buy weakness to the monthly and annual value levels at $259.76 and $257.94, respectively, and reduce holdings on a rebound to the semiannual pivot at $272.78.

The Weekly Chart for Spiders

Courtesy of Refinitiv XENITH

The weekly chart for Spiders will be downgraded to neutral with the ETF below its 5-week modified moving average at $294.55. SPY is well above its 200-week simple moving average or "reversion to the mean" at $246.63 after this average held at $234.71 during the week of Dec. 28. SPY fell below its semiannual pivot at $294.72, which indicates risk to monthly and annual value levels at $288.39 and $285.86, respectively. I do not show value levels below these key levels and if they fail to hold the risk is to the 200-week SMA at $246.62. SPY set its all-time intraday high of $302.23 on July 26. The 12x3x3 weekly slow stochastic reading is projected to end this week at 87.20 down from 89.21 on July 26. If this reading falls below the overbought threshold of 80.00, with the ETF below its five-week MMA, the weekly chart becomes negative.

Trading Strategy: Traders can buy weakness to the monthly and annual value levels at $288.39 and $285.86, respectively, and reduce holdings on a rebound to the semiannual pivot at $294.72.

The Weekly Chart for QQQs

Courtesy of Refinitiv XENITH

The weekly chart for QQQs is neutral with the ETF below its five-week modified moving average at $188.65. QQQs is well above its 200-week simple moving average or "reversion to the mean" at $144.77. QQQ is below its semiannual and monthly pivots at $188.63 and $187.94, respectively, which indicates risk to the annual pivot at $169.27 last tested at the June 3 low as a buying opportunity. I do not show any value levels below $169.27, which indicates risk to the 200-week SMA at $144.77. QQQ set its all-time intraday high of $195.55 on July 26. The 12x3x3 weekly slow stochastic reading is projected to end this week slipping to 86.49 down from 87.74 on July 26. If this reading falls below the overbought threshold of 80.00, with the ETF below its five-week MMA, the weekly chart will be downgraded to negative.

Trading Strategy: Traders can buy weakness to the annual value level at $169.27 and reduce holdings on strength to its monthly and semiannual pivots at $187.94 and $188.63, respectively.

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How to use my value levels and risky levels:

Value levels and risky levels are based upon the last nine weekly, monthly, quarterly, semiannual and annual closes. The first set of levels was based upon the closes on Dec. 31. The original annual level remains in play. The weekly level changes each week. The monthly changes at the end of each month, the latest on July 31. The quarterly level was changed at the end of June. My theory is that nine years of volatility between closes are enough to assume that all possible bullish or bearish events for the stock are factored in. To capture share price volatility investors should buy on weakness to a value level and reduce holdings on strength to a risky level. A pivot is a value level or risky level that was violated within its time horizon. Pivots act as magnets that have a high probability of being tested again before its time horizon expires.

Disclosure: The author has no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.