The Dow Industrials and Transports held up the best last week with technology, internet, biotechs, and IWM being the weakest.

FAANG stocks — led by Facebook on its earnings — hit the skids closing with a record one-day loss.  TWTR and many others also got whacked although GOOGL and AMZN gapped to all-time highs on their positive earnings.

The Internet ETF symbol FDN retraced with the sector and technology weakness last week, but this is an ETF we will want to buy in the future — at the right time based on the right chart set up, of course.

The Technology ETF symbol XLK was pulled lower as well and that along with the Internet ETF symbol FDN weakness suggests that the Nasdaq related ETFs aren't likely the place to be for a while.

However, can Apple's (AAPL) earnings save the day for the tech sector, or will it further drag it down?

The Semiconductor ETF symbol SMH shook off the tech wreck last week for the most part — even with the drop in Intel (INTC), which makes this ETF of interest, but not quite yet.  Stay tuned.

Overall, the summer doldrums aren't giving us great looking opportunities, so we're are okay waiting for them to come to us.

 

Dow Jones Industrial Average

 

Above is the chart of the Dow Jones Industrial Average that we review each week.

Of the broader market indices, after the Transportation Index that was up 2% on the week, the Dow was the next best, up just over 1.5%.

The primary driver of that performance was the underperforming stocks that moved higher, but the performance was offset by Intel (INTC) and Home Depot (HD) down just over 8% and 2.5% on the week, respectively.

The Dow’s move higher was able to overcome the prior week’s swing high and what was the first reference point of Major Resistance (MR).

The prior week’s high is now our reference point of Minor Support (mS) and the next Major Resistance (MR) is in the 25,800 area (that prior high is not shown).

The trend is up with the next resistance area several hundred points away. Clearly, money is moving from what has been performing into what has not.

From the bullish point of view, we do not want to see the Dow move back below the Major Support swing low from last week.

 

ETF Market Overview Video

 

Trend Matrix

NEW ETF TRADE IDEAS

None at this time as there are no quality setups, but we are monitoring a few as discussed above.

NOTE:  Our previous long recommendations for SPDR S&P Biotech ETF (XBI) and Global X Lithium & Battery Tech ETF (LIT) didn’t trigger and had large retracements, so please cancel at this time.

 

OPEN ETF POSITIONS WITH TRADE UPDATES

 

7/12:  ITB – Trade:  Bought ITB at $38.60.

Original Technical Setup:  Buy Setup on the monthly chart after a bullish pullback to r20-MA, possible Breakdown Failure on the weekly chart, and bullish retest of support on the daily.

Trade Update:  Stopped at $37.08.

 

6/4:  XLG – Trade:  Bought the ETF at $195.01.

Original Technical Setup:  Bullish consolidation at the high end of a Bullish +WRB, followed by a Bullish Breakdown Failure (+BDF) reversal.

Trade Update:  Last week XLG continued its strength, making new multi-week highs before retracing with the broader markets Friday.  The ETF looks great on all time frames, no adjustments needed.

Stop Loss: $197.98.

 

6/25:  XOP Trade – Bought the ETF at $43.11.

Original Technical Setup:  Bullish Gap Breakout from multi-week consolidation above the 20/50-MA (Moving Average) on the daily chart, with a bullish engulfing bar on the weekly chart, and a price void (insignificant resistance) above on the monthly chart.

Trade Update:  After breaking out and retracing back to support, the ETF is consolidating tight between the r20- and 50-MA on the daily chart.  The weekly remains in a trading range.

Stop Loss: $40.30.

 

6/25:  XPH Trade – Bought at $44.46.

Original Technical Setup:  Following a Bullish 2-Bar 180-Reversal after Breakdown Failure on the weekly chart, had a Bullish Engulfing above 20/50-MA after > 100% Retracement and Breakout, plus the monthly chart has been in a multi-year trading range with a price void above (insignificant resistance upon a breakout).

Trade Update:  The ETF made new weekly highs and looks great on all time frames before retracing Friday with the broader markets, no adjustments needed.

Stop Loss:   $42.28.

 

7/20:  XTL Trade – Bought at $73.87.

Original Technical Setup:  Breakout all time frames to all-time highs.

Trade Update:  Despite a deep retracement, on Major Support so no adjustments needed.

Stop Loss: $70.78.

 

VIDEO REVIEW OF OPEN AND CLOSED POSITIONS WITH TRADE UPDATES

 

 

 

 

 

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Happy trading!  If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com

 

All the best,

Greg Capra
Managing Director of Master Trader
Trading the Pristine Method — Origin and End

Dan Gibby
Chief Options Strategist

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NOTE:  Master Trader will show opening and closing prices of all stock and options trades.  We recommend that all traders and investors use proper share sizing for positions and money management. However, we cannot recommend what that is for your particular trading style, risk tolerance, or account balance.

We urge you to calculate your own share/position size based on your individualized risk parameters, Trading Plan, and familiarity with the proposed trade strategy and risk. Advanced Management Strategies (AMS) covers in detail foundational and advanced position and money management.

 

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