ETF Focus: Majors

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Let’s look at some of the biggest ETFs after this horrific week. We begin with the Dow 30 “diamonds” fund, which has been in a descending channel for over a year. One warning is that the rally over the past four weeks has been so powerful that, on Friday, we got a little above the resistance trendline. More importantly, however, we remain below the most recent “lower high”, so as long as that is intact, we’ve still got a downtrend.

The Dow Transportation Index has been raging high as well, and it is well below its island reversal gap. It will get harder and harder for this thing to push through all that overhead supply.

The S&P 400 Mid-Cap fund is still respecting its descending trendline.

Another troubling item for the one or two surviving bears out there is that the tech-heavy NASDAQ has pushed above a small bullish base, opening up the prospect for a movement to that descending trendline, which is a respectable distance higher.

The granddaddy of them all, the S&P 500, still has room to roam higher toward the important September 12/13 price gap, which I’ve marked with a horizontal line.

Finally, similar to the DIA at the top of the post, the industrial fund XLI has crossed above its descending trendline, but it remains beneath the most recent major lower high.