What to watch for: The S&P 500 (represented by the SPY ETF) has to hold at the current uptrend line and/or the Nasdaq (represented by the QQQ ETF) has to bounce from the downtrend line.
The broad market has been showing strength in a variety of areas. Techs are still weak, blue ship stocks held their own, and financials showed strength.
Small cap ETFs continued their strength during this weeks trading as we discussed last week.
Gold and gold miners showed some gathering strength but overall still in a downtrend. Sufficient strength was displayed that symbols GDX and GLD might deserve a place on your watchlist when they start appearing on the Strong ETFs or the Best Performing ETFs list.
The SPY is currently holding at the uptrend line as shown in the chart below.
However, negative divergences on many charts including the SPY and lack of buying volume is a serious concern for continued strength.
The QQQ prices are currently holding above the downsloping trendline.
The MACD is below zero which is always a sign of weakness.
The volume is lackluster so a bounce up from this level on increased volume would be a welcome sign before large commitments to tech stocks would be justified.
