Almost everything on my screen struggled last week. Oil and oil stocks were destroyed. All major index ETFs finished the week in the red. Even the iShares 20+ Year Treasury Bond ETF (TLT) gave up its midweek gains. The best-performing assets on my screen were gold and the U.S. dollar, which were essentially flat for the week.
Given the horizontal trend in the stock market, my favorite trend-following tools aren't of much use.
The Invesco QQQ Trust (QQQ) is sitting a bit beneath its 10-day and 21-day exponential moving averages (EMAs) but above its 50-day simple moving average (SMA) and volume-weighted average price anchored to the early November swing low. Unfortunately, QQQ has spent most of the last 19 trading days churning between above $280 and $290. My only advice if you're trading QQQ is to allow for a close beneath the 50-day SMA ($277.50) before assuming the bears are regaining control.
A similar analysis used on QQQ can be applied to the SPDR S&P 500 ETF (SPY) and iShares Russell 2000 ETF (IWM) , so I wouldn't spend too much time trying to debate which of these three index ETFs is in the best position. They're all about the same.
The standout index has been the SPDR Dow Jones Industrial Average ETF (DIA) . Still, with price closing beneath the 21-day EMA and the 14-period Relative Strength Index (RSI) breaking under 50, buyers appear to be stepping away from that market as well.
Look, if you're a scalper, you can try and play the lower edges of the consolidation zones, especially on QQQ and SPY. But if you're a swing or position trader, this is a great time to sit on the sidelines. Because no matter what the charts suggest, with the Consumer Price Index (CPI) coming out on Tuesday and the Fed's interest rate decision, economic projections and news conference scheduled for Wednesday, we're unlikely to see a motivated buyer (or seller) step in ahead of those catalysts.
