The five major U.S. equity averages ended February with mixed technical profiles. The Dow Jones Transportation Average and Russell 2000 are in bear market territory, while the Dow Jones Industrial Average (INDU) and the Nasdaq Composite (NDAQ) are in correction territory. The S&P 500 is just shy of correction territory.

However, there is a new wrinkle this month -- the Federal Reserve meeting March 15-16. Stocks are expected to rally up until the time Janet Yellen takes the podium to announce the Fed's latest policy statement, which could include another rise in interest rates. The market then peaks with a lower high following the latest Fed statement.

The all-important weekly charts show the technicals are neutral, indicating the January or February lows are the base of trading ranges, while key levels cap strength well below the all-time highs. The weekly charts are positive but new monthly levels imply up and down, "risk-on" and "risk-off" trading sessions.

Key levels for March are 16,338 on the Dow 30, 1,937.1 on the S&P 500, 4,663 Nasdaq, 7,321 Dow transports and 989.99 Russell 2000. The overall neutral zone is thus between 989.99 on the small cap average and 4,663 on the broader tech-heavy Nasdaq. Other influential levels are an annual level of 4,238 for the Nasdaq, 7,569 on transports and 1,042.61 on small caps.

Here are the weekly charts for the corresponding exchange-traded funds that best represent the five major averages.

Here's the weekly chart for the SPDR Dow Jones Industrial Average ETF (DIA) , aka Diamonds.


Courtesy of MetaStock Xenith

The weekly chart for Diamonds ended last week positive and will remain so given a close on Friday above its key weekly moving average of $164.96. Its 200-week simple moving average of $158.49 is a key level to hold on weakness. The weekly momentum reading is projected to rise to 36.69 this week up from 33.00 on Feb. 26.

Investors looking to buy Diamonds should enter a good till canceled limit order to buy this ETF if it drops to $163.40, which is a key level on technical charts until the end of March. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $177.66, which is another key level on technical charts until the end of March.

Here's the weekly chart for the SPDR S&P 500 ETF Trust (SPY) , aka Spiders.


Courtesy of MetaStock Xenith

The weekly chart for Spiders ended last week positive and will remain so given a close on Friday above a key weekly moving average of $193.47. Its 200-week simple moving average of $179.91 is a key level to hold on weakness. The weekly momentum is projected to rise to 35.61 this week up from 30.81 on Feb. 26.

Investors looking to buy Spiders should enter a good till canceled limit order to buy this ETF if it declines to $178.51, which is a key level on technical charts until the end of this week. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $214.64, which is a key level on technical charts until the end of March. A key level of $194.21 should be a magnet until the end of March.

Here's the weekly chart and how to trade the PowerShares QQQ Trust ETF (QQQ) .


Courtesy of MetaStock Xenith

The weekly chart for the QQQ's ended last week positive and will remain so given a close on Friday above its key weekly moving average of $103.12. Its 200-week simple moving average of $88.12 is a key level to hold on weakness. The weekly momentum reading is projected to rise to 30.51 this week up from 26.15 on Feb. 26.

Investors looking to buy QQQs should enter a good till canceled limit order to buy this ETF if it declines to $96.72, which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $107.69, which is a key level on technical charts until the end of March.

Here's the weekly chart for the iShares Transportation Average ETF (IYT) .


Courtesy of MetaStock Xenith

The weekly chart for Transports remains positive with the ETF above its key weekly moving average of $129.56 and above its 200-week simple moving average of $128.38. The weekly momentum reading is projected to rise to 42.22 this week up from 33.18 on Feb. 26.

Investors looking to buy transports should enter a good till canceled limit order to buy this ETF if it declines to $131.90 which is a key level on technical charts until the end of March. Investors looking to reduce holdings should enter a GTC limit order to sell this ETF if it rises to $136.24, which is a key level on technical charts until the end of 2016.

Here's the weekly chart for the iShares Russell 2000 ETF (IWN) .


Courtesy of MetaStock Xenith

The weekly chart for small caps ended last week positive and will remain so given a close on Friday above its key weekly moving average of $102.94. Its 200-week simple moving average of $105.79 is a key barrier on the upside. The weekly momentum reading is projected to rise to 26.77 this week up from 21.87 on Feb. 26.

Investors looking to buy the small cap ETF should enter a good till canceled limit order to buy the ETF it drops to $97.99, which is a key level on technical charts until the end of March. Investors looking to reduce holdings should enter GTC limit orders to sell this ETF if it rises to $117.48, which is another key level until the end of March. The $103.68 level should remain a magnet for all of 2016. 

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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