The Three Kings Revisited

We published back at the beginning of March a post that I titled "The Three Kings".  We called them such because they are the three kings of market indices as represented by their respective ETFs.  The S&P 500 {SPY}, the Nasdaq as represented by ETF Symbol ONEQ and the granddaddy of all indices, the Dow Jones Industrial Average {DIA}.  You can double click on each if you want to make them larger.  I couldn't get my editing software to function this morning but you can roughly figure out where they were when we published this three months ago by looking at the line that travels up through the abbreviated March notation.  What do we notice about all three?

1.  Each is a mirror image of the other in terms of how they've traded over the past ten months.  

2.  Each broke out of a consolidation pattern back at the beginning of the year.  Each has trended higher with a series of higher highs and lower lows since last fall.  

3.  Each seems to have currently run into a bit of resistance.

4.  Each has traded to new highs since March but each now trades roughly at the same levels you saw back then.

5.  Each is also currently overbought by our work longer term. 

Probability suggests that the markets may experience a bit of a bounce here now that we're at the beginning of the month. Crystal ball doesn't go much beyond that point right now.

Back later in the week.

Charts are from FINVIZ.com.

*Long ETFs related to all three of these indices.  ETFs related to the Nasdaq and the S&P 500 I am long in both client and personal accounts.  Long DIA as a legacy investment in certain client accounts.  Please note these positions can change at any time without notice to our readers.