SPDR S&P 500 ETF (SPY): SPY has worked off a near-term overbought condition that developed as a result of the Feb-Mar.2013 rally (5.10%). However, it will likely take a convincing move above the 2000/2007 highs (155.75/157.52) to trigger a major short squeeze and force sideline money into the market. If that occurs, then how high is high? SPY may go as high as the low-160s to 170 in a speculative type of market before reaching a major market top. Sector rotations may help to signal a peaking market. [Sector ETF Technical Update]
PowerShares QQQ (QQQ): Although the consolidation this month may be constructive, the 3/19 and 3/25 2013 negative outside days warn of distribution forces at work. Over the very near-term (days/weeks), a small trading range is likely to be confined to 67.60-69 or near the Mar. 2013 low and the Mar. 2013 highs. The intermediate to longer-term concern remains the continued weakness in relative strength and the potential yearlong head and shoulders top. Key supports reside at the 2009 trend line (64) and neckline support (60).
iShares MSCI Emerging Market ETF (EEM): A short-term technical oversold rally may develop on the ability to find support near the bottom of the Dec. 2012 downtrend channel. However, keep in mind that the near-term trend remains down and the intermediate to longer term outlook still has a multi-year head and shoulders top pattern to contend with. From a relative strength perspective, domestic equity market ETFs like SPY continue to dramatically outperform. Therefore, for the time being, both relative and absolute rallies need to view with caution and opportunities could be taken to unload weak positions.
iShares FTSE China 25
J. Beck Investments is an independent provider of technical research for ETFs.