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4 Of 5 ETFs That Track The U.S. Equity Averages Set New Highs Last Week, The Russell 2000 Did Not

The five major U.S. equity averages can be traded using ETFs. The Dow Jones Industrial Average and S&P 500 are represented Diamonds and Spiders, respectively. The Nasdaq 100 is represented by the QQQ’s, Transports by iShares IYT and the Russell 2000 by iShares IWM.

SPDR Dow Jones Industrial Average ETF (DIA)

Courtesy of MetaStock Xenith

The weekly chart for Diamonds ($228.73 on Oct. 13) is positive but overbought with the average above its five-week modified moving average of $223.14. The ETF is above its 200-week simple moving average or “reversion to the mean” at $181.76, last tested during the week of Feb. 12, 2016 when the average was $157.98. The 12x3x3 weekly slow stochastic reading rose to 92.59 last week up from 89.52 on Oct. 6 moving further above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my semiannual and annual pivots of $221.24 and $220.14, respectively. Sell strength to my weekly, monthly and quarterly risky levels of $230.20, $231.08 and $232.31, respectively. My annual value level lags at $150.83.

SPDR S&P 500 ETF Trust (SPY)

Courtesy of MetaStock Xenith

The weekly chart for Spiders ($254.95 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $250.17. The 200-week simple moving average or “reversion to the mean” is $210.38. The 12x3x3 weekly slow stochastic reading rose to 90.37 last week up from 86.52 on Oct. 6 moving further above the overbought threshold of 80.00.

Investment Strategies: Buy weakness to the 50-day simple moving average of $248.59 and rising each day. My annual pivot is $253.37. Sell strength to my weekly, monthly, quarterly and semiannual risky levels of $258.09, $259.19, $261.42 and $264.54, respectively. My annual value level lags at $167.75.

PowerShares QQQ Trust ETF (QQQ)

Courtesy of MetaStock Xenith

The weekly chart for QQQ’s ($148.34 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $145.45. The 200-week simple moving average or “reversion to the mean” is $110.96. The 12x3x3 weekly stochastic reading rose to 87.97 last week up from 84.38 on Oct. 6, moving further above the overbought threshold on 80.00.

Investment Strategy: Buy weakness to my annual pivot of $139.42. My quarterly pivot is $148.62. Sell strength to my monthly, semiannual and monthly risky levels of $150.40, $152.14 and $154.91, respectively.

iShares Transportation Average ETF (IYT)

Courtesy of MetaStock Xenith

The weekly chart for the Transportation Sector ETF ($178.76 on Oct. 13) is positive with the ETF above its five-week modified moving average of $173.65. The 200-week simple moving average is the “reversion to the mean” at $150.26, last tested during the week of July 8, 2016 when the average was $132.92. The 12x3x3 weekly slow stochastic reading rose to 76.26 last week up from 69.64 on Oct. 6.

Investment Strategy: Buy weakness to my quarterly and monthly value levels of $173.93 and $173.56, respectively. Sell strength to my annual and semiannual risky levels of $182.54 and $191.56, respectively.

iShares Russell 2000 ETF (IWM)

Courtesy of MetaStock Xenith

The weekly chart for the small caps ETF ($149.37 on Oct. 13) is positive but overbought with the ETF above its five-week modified moving average of $144.83. The 200-week simple moving average or “reversion to the mean” is $121.51, last tested during the week of July 1, 2016 when the average was $108.66. The 12x3x3 weekly slow stochastic reading rose to 84.48 last week up from 78.92 on Oct. 6, rising above the overbought threshold of 80.00.

Investment Strategy: Buy weakness to my monthly and semiannual value levels of $146.82 and $144.04, respectively. Sell strength to my quarterly and annual risky levels of $151.26 and $154.33, respectively.

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