A week of sustained, high-volume selling has now been followed a rather lackluster rebound. Looking at the one year chart, we can see price stalling under the 200 day moving average. A closer look at the 30 minute chart shows us short-term resistance near 110.50.

Looking forward, I am expecting a resumption of bearish action toward the end of the week, and will be favoring short trades. However, looking at an overview of sector charts, the signals are quite mixed. While many sector charts remain technically bullish, this market feels like it is being controlled by the sellers. Such an environment can make for dicey trading.

- IWM: The small caps still have higher highs and higher lows in place. I don’t see a good edge in either direction.

- QQQQ took a big dive last week on very heavy volume, and could be shorted on any break of the short-term (3 days) trendline.

- XLF: The financials have been trading sideways since September. Charts for big banks (GS, BAC, MS, JPM, WFC) are generally bearish.

- KRE: Charts for regional banks look much better. Obama seems to be looking for policies to benefit regional banks at the expense of too-big-to-fail. If the broader market falls, however, the entire financial sector will suffer.

- XLY: Consumer discretionary stocks held up relatively well during last week’s selloff. This chart still looks bullish for now.

- XLI: The industrials remain above key support. This chart also looks bullish.

- XLB: The materials sector saw an extremely high volume of selling last week, but the price of XLB remained above key support. The real opportunity to short this ETF will come if price gets below 28.50.

- SLX: Distribution in the steel sector last week, but price remains above key support.

- – OIH: Oil service have remained in a trading range during the past week.

-IYR held up well last week and remains in a bullish orientation.

- EEM: For now the chart looks okay. A break below the 200 day moving average would be quite bearish for the emerging markets ETF.

- FXI: This is a bearish chart, with distribution last week, followed by a weakening rally, with price stalling below the 200 day moving average. I will be looking to short on a break of the short-term (five days) trendline.

- IFN: The Indian ETF has gone nowhere since last May, with price slowly consolidating. I will be looking to short under the 28.00 area.

- EWZ: A break below 65.00 would be bearish for the Brazil ETF.

Tags: eem, ewz, fxi, ifn, iwm, iyr, kre, oih, qqqq, slx, xlb, xlf, xli

This entry was posted on Wednesday, February 3rd, 2010 at 8:00 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.