ETF Watch: Grind Higher Continues in U.S. Indices

The boring grind higher in the U.S. indices continues, and our Bayesian timing system (BTS) still expects for the SPDR S&P 500 ETF (SPY) to see the mid- to upper-280's. A move through there, and 292-294 on this swing is possible.

In the most likely and bullish scenario a more direct run to at least the mid-280's has begun, with a probability of 59%, versus backtesting the 272-273 breakout area and then pressing to the mid-280's (probability 37%).  Note that below 266 and the entire bullish bias would need to be seriously reconsidered). On a micro level, there is high level support in the 276 area.

Moving on to oil, the July 3 high has held, and the BTS continues to see this as a wave B top with targets in the low 12's and possibly the low 11's in the US Oil ETF (USO) once this bullish sentiment clears out.  

Metals have broken lower out of their several week base; however, the BTS identified a vibration window spread evenly over the remainder of this week (7/18-7/20).  Given the multi-month perspective of a low now, this window is important on many levels.  On a micro level, back above 117.50 and then 118.25 will begin to mark a turn; above that and a re-challenge of important resistance at SPDR Gold Shares (GLD) 120.25-120.75 needs to be cleared. The "all clear" won’t be achieved until a daily close above 121.50, which should then begin the march to as high as GLD 133-135.  

In natural gas, unable to get through 24 yet again, the US Natural Gas ETF (UNG) trades back into the 22-23 basing area.  On a micro daily level, it looks like what Elliott Wave folks call an "ending diagonal" is setting up.  A dip back into the 22 area could be an opportune time to see a reversal back higher.  Higher targets are still expected into 25, and it now looks like 28 could happen if things keep building.  On a micro level, a sustained run over 22.50 should be the tell that a low is behind us.

Among other ETFs to watch:

DBA: Signal Long.  The “on the clock” has thus far been accurate in identifying another basing area – however, closing above 17.50 is needed to get back to 18 resistance.

XLF: Signal Long.  Chewing on resistance at 27.45; above that and staring down 28...

EEM: Signal Long.  Still challenging the signal trigger price.  This signal remains a great RR… getting that close above 44.25 remains important for the next target at 46 or as high as the 48s.  

UUP: Signal Short.  The signal trigger price continues to attract attention as resistance in the low 25s.  Still thinking a quick trip to the low 24s are in the cards.

XME: Signal Long.  The 37 level caused a consolidation, and above 37 still targets 38.50.

SMH: Signal Long.  Consolidating the recent gains while the next leg higher to 108 continues to gain traction.