ETF Watch: Eyeing SPY Breakout
The U.S. equity indices continue to carve out a bottom with the 271 level on the SPDR S&P 500 ETF (SPY) holding as support. Targets remain in the mid-280s and then 290s. There is risk it could move down to the 266 level, but "everyone" is beginning to see that level; so in a bullish scenario we turn above it, and it would become increasingly risky for bulls the closer we got to 266, as "too many on the same side of the boat" becomes an issue.
The most likely path sees the SPY basing in the 270-273 consolidation range and then breaking strongly above 273. It wouldn't be surprising to see a 2-3% upside move within 48 hours of this base being completed.
In oil, with the US Oil ETF (USO) unable to break below 13 last week and breaking above the low 14s this week, a violent exhaustive move launched in the bulls' favor. We still see this several day move higher as "ending something" versus "beginning something." As such, targets in the low 12s and even possibly the low 11s are still most likely to be seen.
Metals continue to hang onto their bullish potential with SPDR Gold Shares (GDX) and iShares Silver Trust (SLV) maintaining above their important levels, yet with GLD extending beneath 119.50. Watch for a low sometime this week followed by a strong rally with a tradeable potential to match the December 2015 launch. IF this bottom is put in, then 133-135 is the multi-week target. On a micro level, keep in mind GLD resistance levels of 121, 122, and 124, with 124 really opening up that multi-month bottom up to the mid 133s. On a micro level, getting above GLD 120.50 needs to happen sooner than later.
In natural gas, the United States Natural Gas (UNG) has made another attempt to work back towards that 24 resistance. Higher targets are still expected into 25 and now looks like 28 could happen if things keep building.
In agriculture, the Invesco DB Agriculture (DBA) is hanging around that 18-ish level, below the important 18.25 level. It's going to need to knock down some wall above at 18.55, 19, 19.35, and 19.50. At a minimum, a retrace back to 19 is expected before making a decision with this signal.
The SPDR S&P Biotech ETF (XBI) is basing just beneath 27 and waiting for that sustainable move above 27.25 and XLF. Breaking above 27.50 will yield 28 before deciding to continue to 29.
The iShares MSCI Emerging Markets ETF (EEM) continues its base for much higher prices. All in all the risk-return on this signal is quite good, with a close above 44.25 most likely providing the fuel to a minimum bounce to 46. Over 46 and mid-48s seem very doable over a several week hold. On the downside of things, a there's a price clusterin the high 42s.
In the Invesco DB US Dollar Bullish (UUP), we like this current area for a multi-week top. The obvious first target is 24.75, but through that and things could get interesting down to 24.25 and then 24.
In the SPDR S&P Metals and Mining ETF (XME), targets still reside near 37, with a several week target of 38.50.
The VanEck Vectors Semiconductor ETF (SMH) is asing well. It needs above 105.50 to really get ignition to that several week 110 goal.