The bulls appear to be losing control of the U.S. stock market, as the PowerShares QQQ reached its price target. Last Wednesday, all five stock market exchange-traded funds gapped lower on the clouds of the investigation of the relationship between the Trump presidency and Russia. Let's look at the five equity ETFs, then analyze the weekly charts and provide the key trading levels.
The SPDR Dow Jones Industrial Average ETF (DIA) - Get Report, known as Diamonds, has been downgraded to a neutral weekly chart and lags its March 1 all-time intraday high of $211.59.
The SPDR S&P 500 ETF Trust (SPY) - Get Report, known as Spiders, has a positive weekly chart but lags its March 1 all-time intraday high of $240.32.
The PowerShares QQQ Trust ETF (QQQ) - Get Report , known as QQQ's, has a positive but overbought weekly chart and set its latest all-time intraday high of $139.64 on May 16, giving investors the opportunity to reduce holdings at $139.27 and $139.42, which have been by semiannual and annual risky levels since the beginning of 2017.
The iShares Transportation Average ETF (IYT) - Get Report, known as transports, has been downgraded to a negative weekly chart and lags its March 1 all-time intraday high of $173.88.
The iShares Russell 2000 ETF (IWM) - Get Report, known as small caps, has been downgraded to a negative weekly chart, after setting its all-time intraday high $141.81 on April 26.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.
Here's the Scorecard for Five Equity ETFs
The PowerShares QQQ remain the leader so far in 2017 with a gain of 16.3% year to date, down from a 17% gain a week ago. This ETF is in bull market territory 20.9% above its Nov. 14 post-election low of $114.03. The laggard is transportation down 1.7% year to date. This ETF is 7.9% below its post-election high of $173.88 set on March 1.
When looking the weekly charts below, keep an eye on the 200-week simple moving averages shown in green, as investors should consider this level as the "reversion to the mean." The "reversion to the mean" is an investment theory that the price of an index, stock or ETF, will eventually return to a longer-term simple moving average, and the 200-week is simple to track. A ticker trading above its "reversion to the mean" will eventually decline back to it on weakness. Similarly, a ticker trading below its "reversion to the mean" will eventually rebound to it on strength.