ETF Watch: SPY Still On Path to 290's
In general terms, the path to the 290's in the SPDR S&P 500 (SPY) is still on the table -- the real question is how deep of a correction will be seen in the short term?
At the moment, there are two paths that stick out, with a bit more clarity now: The first and slightly higher probability is that the indices grind higher to all-time highs on the SPY, which then gets a boost higher very quickly into around 292; this path allows for corrections as deep as around 284.
The second is that the indices have a more distinct, but noticeable, pullback before a run at the 290s; this pullback could be as deep as 280-282.
Keep in mind that both of these paths are on the conditional branch of the Long signal remaining intact -- a change in signal would have a different set of conditional scenarios.
In oil, the US Oil ETF (USO) has held the vibration high from July 3. We continue to see this as a wave B top with targets in the low 12's and possibly the low 11's once this bullish sentiment clears out.
In metals, on a micro level, the SPDR Gold Shares (GLD) getting back above 111.90 and 112.50 were very important for the checklist; and the most important micro hurdle would be 113.50. Above 113.50 should target 116 at a minimum.
Regarding the Gold Miners ETF (GDX) on a micro level, there is 18.55, 18.90, and then 19.25 to get the ball rolling back uphill. Initial multi-week target now stands at 20.70-21.00, above which can target 23-24.
In natural gas, the US Natural Gas (UNG) has consolidated near 24, which is a bullish indication, and is still working towards 25 and higher.
Among other ETFs:
DBA: Signal Long. As we previously wrote, "The basing area of mid-July still presents as a multi-week to multi-month bottom with DBA still hovering above it. The vibration low from a few weeks ago was broken (DBA 17.20 level); getting back above 17.20 imminently is required to keep this long signal alive. Back above 17.20 does indicate the reversal should continue – but this needs to happen by the end of this week; preferably on 8/16. As such, the move higher should commence and closing back above 17.50 is next on the list.” Closing back below 17.20 is not helpful at all; and the BTS is back to having DBA “on the clock”. The last on the clock in DBA did pan out – keep in mind, an on the clock is nothing more than a very high Bayesian probability (BP) vibration window low that doesn't always lead to a sustainable price change, but at a minimum a quick price reaction in the direction of the signal.
EEM: Signal Long. As we previously wrote, “Holding 42.50 on any pullback and getting above 44.25 should get the bottom is in call going again.” Well, EEM pulled back to nearly exactly 42.50; let’s see if there is any traction higher off the rubber band pull on 8/24. All in all, EEM remains in a basing pattern and still presents good RRs for a strong move higher out of this multi-week base.
UUP: Signal Short. On 8/15, UUP did put in a reversal candle attempt and closing below 25.50 does provide modest evidence of an important turn. On the micro level, be aware of BP resistance at 25.60 and BP support at 25.35. As expected, a retrace to test previous support with UUP touching exactly 25.35 resistance (was prior BP support). If the BP path plays out, then UUP is headed back to the signal trigger price and if it gets there, will most likely begin its journey to the low 24s.
XME: Signal Long. Similar to GDX and the metals, XME did have a deep retrace; but no damage done yet to the several day basing pattern. 8/24 should help clean the BP paths up.
XBI: Signal Long. The BTS continues to like this staging area for a press to ATHs; and holding the 7/30 level on a closing basis keeps the signal alive. Finally got that close above and then backtest of the 96.25ish region; ideally any backtests will be bought and the next stop is 98; and then either to ATHs or back to neutral.