Days like today (Dow down 335.60) always feel like there is trouble on the way.
Days when the Dow is up 300 feel like all is right.
Volatility is still high. Big directional swings are still present. Expect this to continue through Q2.
The Dow broke short term support today which followed Friday’s S&P 500 index break. The daily chart of DIA shows this break along with the recent big daily directional swings compared to all of 2017.
SPDR Dow Jones Industrial Average ETF (DIA) daily
While this isn’t a big deal for a longer outlook it is short term negative. Don’t be surprised to see DIA 240 tagged before this is over.
Interest rates, energy, $US and financials are noteworthy.
iShares Barclays 20+ Year Treasury Bond Fund (TLT) monthly
At the risk of sounding like a broken record the price action for TLT is negative. This means it is likely that price will try and work down into 115. Price has already violated intermediate support most likely triggering the big dump in early February. If 115 gets taken out look out below mates.
SPDR’s Select Sector Energy ETF (XLE) weekly
After the big correction six weeks ago XLE has hovered at or above support not catching much of a bid. Today price violated this rising support level. It’s only one day but not a good sign. The next support level is 61.80. This one is starting to stink.
PowerShares DB US Dollar Index Bullish Fund (UUP) weekly
UUP has been sliding lower since early 2017 and has recently stalled the slide at a significant support level. I wouldn’t call it a bounce off support unless you consider dropping a rock in mud a bounce. $23 is the next line in the sand. Closed today, Monday, $23.52.
SPDR’s Select Sector Financial ETF (XLF) monthly
XLF is flirting with all time highs from 2007. If price can get up and through this resistance zone the overall market should benefit.
The next few months should be interesting. Time for some music.
Trade Smart,
Don