SPDR S&P 500 ETF

Up first is the SPDR S&P 500 ETF ( SPY). This $128 billion exchange-traded fund is a stellar proxy for the broad market, so as SPY goes, so go other stocks too. I've been saying for a while that the rally in 2013 has been orderly -- a quick look at SPY's chart shows what I mean.

SPY has been trading higher in a trend channel since shares made a swing low in November. Even though this fund has seen some big corrections, trend line support has acted as a price floor for this ETF the entire time. That's a very good thing because it gives us a high-probability trading range for shares. SPY is consolidating right now, churning sideways as it burns off some overbought momentum, but buyers have been building strength in the last few weeks.

One key difference between SPY and the S&P 500 index itself is that SPY has already made new record highs. That's largely because SPY, unlike the S&P, is directly investible. That indicates that buyers are still willing to step in and pick up equities at new, higher levels. As SPY nears the low end of its trading range, investors should be looking to buy the dips.

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