1st July 2014

June has now closed and we have yet to see the ‘Sell in May and Go Away’ phenomenon for 2014. In fact, it has been the quite the opposite. The S&P500 and DJIA have recently made bullish ascending triangle breakouts and the NASDAQ made a ‘Bull Flag’ breakout and has also made a bullish close above the 4,400 level to close out for June. I had suggested the S&P500 and DJIA might wait to see if the NASDAQ could break 4,400 and, now that this has evolved, I’ll be looking for bullish continuation with all three indices.

S&P500 daily: the daily and monthly support trend lines are still intact:

S&P500 monthly: The index closed with a bullish monthly candle. I am expecting a pull back at some time and wrote an article recently where I looked at possible targets for both bullish continuation and bearish pull back scenarios. This article is still relevant and can be found through this link.

DJIA daily: holding above the bullish ascending triangle breakout:

DJIA monthly: 

NASDAQ daily: this made a bullish ‘Bull Flag’ breakout a few weeks ago and has now made a bullish close above the recent high of 4,400:

NASDAQ monthly: 

Russell 2000: the US small cap index also made a ‘Bull Flag’ breakout recently. The next level to watch for here is the $1,210 level:

RUSSELL 2000 monthly: interestingly, Elliott wave suggest a pull back to the previous breakout level ($870). The same pattern exists for the S&P500.

IWM: the Russell 2000 ETF is similar to the Russell 2000. No surprises there! Thus, a ‘Bull Flag’ has evolved here too and the next level to watch for reaction is the 120 level:

IWM monthly: It’s then also no surprise to see Elliott wave suggest a pull back to the previous $85 breakout level:

VIX weekly: no warning bells here just yet:

‘Bellwether’ Stocks and ETFs: there are no warning signs on any of these stocks or ETFs just yet:

UPS: held by a weekly support trend line:

FDX: continues from the bullish triangle breakout:

IYT: the transport ETF hasn’t looked back since the triangle breakout:

TSLA: the bullish ‘descending broadening wedge’ was on the money here:

USO weekly: the Oil ETF has made the bullish triangle breakout BUT I’m waiting for a close above the $40 level:

SLV: has made a bullish triangle breakout:

GLD: The Gold ETF is setting up with a bullish ‘Inverse H&S’ as the metal itself is. The ‘neck line’ for the Gold ETF though appears to be at the $135 level:

Summary: there is still a lot of high impact data to come this week and US NFP is probably the most significant of all of these. This batch of data is likely to impact the USD and this, in turn, might determine the next trend for these indices, stocks and ETFs. The markets cannot continue upwards forever and I have trend lines in place to guide me to enable me to work out whether any pull backs are simply short term reversions to the mean or, possibly, indicative of a deeper correction. I will continue too watch these levels but, until then, I’m trading with the trend.

Post script: Chinese PMI data has just come in as expected but at the highest level in 6 months. I am just back from a short trip through parts of Asia and was amazed at the amount of major construction and development occurring throughout the areas we visited. I’m not buying into any further ‘Chinese slow down’ propaganda! They are full steam ahead!