A growing number of Real Money subscribers have been asking where the popular ETFs, the SPDR S&P 500 ETF Trust ( SPY) and the Invesco QQQ Trust ( QQQ) , are headed. Others wonder if this is the bottom. What will be the new leadership?
These questions are good as it tells me you are still involved in the markets and you have not given up on investing. 
Some questions do not have answers just yet, however. For example, future leadership is not found until near a bottom as farsighted investors buy and slow the decline. The sectors and industries showing the best relative strength will likely be the new leaders. We are not there yet.
Price targets are another problem for investors. In my many years interacting with financial advisors I learned to tell them that the level was not as important as the price action.
If you decided for whatever reason that 3200 was going to be the bottom in the S&P 500 and it stopped going down at 3300 and turned upwards you are really annoyed that you missed the turn. The other problem would be buying at 3200 only to see the index slump still further to 3000 or 2800. Your clients are then not pleased that you didn't do better for them.
Get the idea? It is not that you cannot time the markets, it is dealing with clients and their emotions and expectations. That is the really tough call in this business.
OK, now let's check out some charts.
In the weekly Point and Figure chart of the SPY, below, we can see a potential (guidance if you please) price target of $321. This target can change. It could improve. It could get more bearish. We will need to dig into the 11 sectors of the S&P and look for the sectors that might be bottoming. Hopefully, we can find three or four sectors that are making higher lows and give us a clue that prices will be higher six or nine months in the future.
In this weekly Point and Figure chart of QQQ, below, we can see a potential target in the $210 area. Yes, the QQQ has already suffered a steep decline but this is what the software is suggesting at this point in time.
Bottom-Line Strategy
My advice is simple. Continue to pay attention to the markets. You never learn anything by giving up.
Tops represent greed but bottoms represent fear and panic and fear is easier to figure out than greed. Forget 90% downside days. Forget stories of forced liquidation. Forget valuation being absolutely compelling.
Wait for that white knuckle day or days when you have a really sick feeling in your gut. Wait for a declining number of new lows being made. Wait for long lower shadows on the daily candlestick charts.
Stay tuned and we'll do this together.
