After Fed Chief Powell confirmed his view on a policy of gradual rate increases pre-market last Friday, most broader markets closed at new highs.

We continue to maintain our bullish bias.  Our open trades are doing great, and we have two new ones now.


Dow Jones Industrial Average


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

The Dow certainly wasn’t the focus last week with the bullish news of many indices hitting new all-time highs.

Actually, while it started off the week bullishly moving higher and able to push above the immediate Major Resistance (MR) area above, it pulled back afterward.

If it wasn’t for Friday’s rally, the Dow would’ve closed slightly negative on the week.

Friday’s rally did save the week and the Dow closed up 121 points.

Ideally, the bullish scenario is for the Dow to take out last week’s high decisively, leaving last week’s low as new Major Support (MS) on the daily time frame.

If a pullback should occur early in the week and the Dow was to move below last week’s low first, however, that would not negate the bullish scenario.

However, pulling back as far as 24,400 would certainly put that in question.

Because of the sharp pullback that happened last February, the Dow now has an open “Void of resistance” above.

Last week’s bullish move to new all-time highs in the indices mentioned earlier continue to support our bullish bias for the markets.


ETF Market Overview Video



Trend Matrix





Below is a daily/weekly chart of Communication Services Sel Sect SPDRETF (XLC).



Trade:   Over $49.44 consider buying the ETF.

Technical Setup:   Bullish higher low bottom on new issue ETF after making new lows daily, Consolidation on r20-MA following Master Trader Buy Setup and Bottoming Tail on the monthly chart, retest of prior low and possible Breakdown Failure on the weekly.

Stop Loss:   $47.86.


Below is a monthly chart of SPDR S&P Telecom ETF (XTL).



Trade:   Consider buying the ETF at current levels or better.

Technical Setup:   Bullish Wide Range Bar (+WRB) Breakout from bullish multi-year trading range above the r20-MA on the monthly chart.

Stop Loss:   $70.95.





8/8:  LIT – Trade:  Bought ETF at $32.69.

Original Technical Setup:  Bullish consolidation on r20-MA after retracement to support area on the monthly chart, and bullish new low divergence on the weekly chart (meaning the lower low didn’t fall very far before buyers stepped up).

Trade Update:  Stopped at $31.58.


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 broke out and closed at all-time highs.  The ETF looks great on all time frames, raise stop to $199.67.

Stop Loss: $201.22.


8/20: XLI – Trade:  Bought the ETF at $76.45.

Original Technical Setup:  Anticipated Breakout after 100% retracement and Bottoming Tail at r20/50-MA weekly, bullish engulfing at r20-MA monthly.

Trade Update:  XLI triggered and retraced to support after making new multi-week highs.  The ETF looks great on all time frames, no adjustments needed.

Stop Loss:  $73.98.


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 consolidated in a bullish manner last week.  It looks great on all time frames; however, the weekly chart is extended and closed with a Topping Tail.  Therefore, we are recommending trying to sell the Sep (9/21) $49 call option for around $1.00 to $1.40/share.  It is very illiquid (closed at $0 x 1.40) so just place a limit order and see if a buyer pays the asking price which might get hit on a rally.  The monthly chart looks great so we are just looking to lower our cost basis by selling the call option because of the extended weekly chart .

Stop Loss:   $47.49.





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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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