Declines Continue for ETFs Tracking the U.S. Stock Market

The weekly charts for the Dow Jones Industrial Average (INDU) , S&P 500 , the Nasdaq Composite (NDAQ) and the Nasdaq 100, and the Russell 2000 remain negative. The weekly chart for Dow Transports remains neutral.

Overnight strength in S&P Futures will do not change the weekly charts today. Additional upside is required by the close on Nov. 11. What the futures charts show is that the contract held its 200-day simple moving average at Friday's low of 2,079.0, and that the contract is well below its key weekly moving average of 2,127.7. Weekly technical momentum continues to decline.   

Investors should be aware that the technicals of the U.S. stock market continue to deteriorate. The key to become more negative on stocks requires a downgrade to negative on the Dow Transportation Average. This requires a weekly close below the key weekly moving average of 7,995.87, as weekly momentum is already declining below the overbought threshold of 80.00.

Here's the daily chart for the SPDR Dow Jones Industrial Average ETF (DIA)  

 

Courtesy of MetaStock Xenith

Diamonds trades close to $179, up 2.7% year to date after setting its all-time intraday high of $186.88 on August 15.

The horizontal lines of the daily chart for Diamonds are the Fibonacci retracement of the rise from its Jan. 20 low of $154.38 to its Aug. 15 all-time intraday high of $186.88.

Diamonds have been moving sideways to down below its 50-day simple moving average on Sept. 9 when the average was $184.05. This moving average was tested on Sept. 20 and Oct. 10 and is the ETF is now below the 50-day SMA at $182.06. Diamonds ended last week below its 23.6% retracement of $179.21 and above its 200-day simple moving average of $177.58.

Investors looking to buy Diamonds should do so on weakness to $177.58, which is a the 200-day simple moving average. Investors looking to reduce holdings should do so on strength to $181.25 and $183.08, which are key levels on technical charts until the end of this week and until the end of 2016, respectively. My annual value level lags at $145.61.

Here's the daily chart for SPDR S&P 500 ETF Trust (SPY)

 

Courtesy of MetaStock Xenith

Spiders trades at $208.50, up 2.3% year to date after setting its all-time intraday high of $219.60 on August 23.

The horizontal lines of the daily chart for Spiders are the Fibonacci retracement of the rise from its Jan. 20 low of $181.02 to its Aug. 23 all-time intraday high of $219.60.

Spiders gapped below its 50-day simple moving average on Sept. 9 when the average was $216.37. This moving average was tested on Sept. 22, Sept. 30 and Oct. 10 and today this average is $214.70. The ETF is now below its 23.6% of $210.49 and tested its 200-day simple moving average of $208.29 on Friday.

Investors looking to buy Spiders should consider buying weakness to $192.47, which is the 200-week simple moving average. investors looking to reduce holdings should consider selling strength to $212.83 and $216.55, which are key levels on technical charts until the end of this week, and until the end on 2016, respectively. My annual value level lags at $163.38.

Here's the daily chart for the PowerShares QQQ Trust ETF  (QQQ)

Courtesy of MetaStock Xenith

QQQ closed Friday at $113.65 up 1.6% year to date after setting an all-time intraday high of $119.66 on Oct. 25.

The horizontal lines of the daily chart for QQQ are the Fibonacci retracement of the rise from its Feb. 8 low of $94.84 to its Oct. 25 all-time intraday high of $119.66.

After setting its all-time high, QQQ closed below its 50-week simple moving average at $117.37 on Oct. 28, which led to a test of the 23.6% retracement of $113.80 and closed Friday just below it at $113.65. The risk is to the 200-day simple moving average of $110.57.

Investors looking to buy QQQ should consider buying weakness to the 200-day simple moving average of $110.57. Investors looking to reduce holdings could have done so on strength into the zone of monthly and quarterly levels at $119.06 and $119.81, respectively. This week's risky level is $119.60.

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

Courtesy of MetaStock Xenith

The transports ETF trades over $145, up 7.9% year to date. Dow transports remain in correction territory 13.3% below its all-time intraday high of 9,310.33 set on Nov. 28, 2014.

The weekly chart for the transportation ETF has been downgraded to neutral with the ETF above its key weekly moving average of $143.79 and above its 200-week simple moving average of $137.34. The weekly momentum reading ended last week at 75.37 down from 76.97 on Oct. 28.

Investors looking to buy the transportation ETF should consider doing so on weakness to $139.62 and $136.24, which are key levels on technical charts until the end of 2016. Investors looking to reduce holdings should do so on strength to $151.34, which is a key level on technical charts until the end of November.

Here's the daily chart for the iShares Russell 2000 ETF (IWM)

Courtesy of MetaStock Xenith

The small-caps ETF closed Friday at $118.03, up 4.8% year to date and set its 2016 high of $125.88 on Sept. 23.

The horizontal lines of the daily chart for the small-cap ETF are the Fibonacci retracement of the rise from its Feb. 11 low of $93.64 to its Sept. 23 multiyear intraday high of $125.88.

The small-cap ETF gapped lower on the day after setting its multiyear high. The ETF closed below its 50-day simple moving average when it was $122.97 on Oct. 11. On Nov. 1, this ETF plunged below its 23.6% retracement of $118.27 and the week's low was $114.88 on Nov. 3. The ETF is above its 200-day simple moving average of $114.41 and its 38.2% retracement of $113.56.

Investors looking to buy this ETF should do so on weakness to $103.68 which is a key level on technical charts until the end of 2016. Investors looking to reduce holdings should do so on strength to $118.27, which is a key level on technical charts until the end of this week.

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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