$SPY weekly chart- Impressive action in the overall market after dipping below the 50EMA on Monday. As it happened twice in the past 2 month, this area has proved to be a great buying opportunity. We bounced off it and managed to close the week at new all time highs as several sectors took the lead throughout the week, helping the entire performance of this ETF. For the next period, we are a bit extended, and with the busiest earnings week upon us, be careful adding any longs know. Wait for the reports to be digested, and see where the action takes us. We have added some hedges at the close to protect against our longs, mainly the option plays for the earnings reports of $AAPL, $AMZN, $FB, $PYPL, $PINS.
$QQQ weekly chart – The tech sector quickly recovered after the gap down on Monday morning. Several stocks managed to help the overall ETF reach a new all time high on Friday. $MSFT, $GOOGL and $FB made new all time-highs, while $AAPL and $AMZN recouped the losses from early in the week. For next week with earnings in full swing expect lots of volatility, as this will be a make-or-break event for this sector. Depending on the earnings, we might have a pullback to the moving averages as we are extended in the present.
$IWM weekly chart – The small caps index measures the risk appetite of investors. On Monday it reached the bottom of its yearly channel and managed to find support. It had an impressive bounce off it, as more money poured into riskier assets as investors soon realized that not all is doom and gloom for the US market. However, once it reached the momentum moving averages it was rejected and closed the week on the wrong foot. See how it acts next week with all the big earnings happening in less than 3 days. It remains the leading indicator of the market for us.