Good news, or at least I think it is one that we are still in rangebound markets. However, I certainly do not want to see the markets go side way. No predictions here, and the earning season is just around the corner, so where are we heading are still wait to be seen. The Fed is working on the credit crisis, housing market is still weak, recession is definitely here. There are still some news and economic data to be announced during this week, such data as ISM Mfg Index on Tuesday, Factory orders, on Wednesday, Employment situation on Friday. Mr. Ben Bernanke will be speaking on both Wednesday and Thursday to address the financial turmoil and Bears and JPM’s merger. It will be a hectic week, let’s look at chart and see what could happen.

Daily Chart:

1. spy-day.gif 2. qs-day.gif 3. xlf-day.gif

Weekly Chart:

1. spy-week.gif 2. qs-week.gif 3. xlf-week.gif

1. SPY: The SPY is trading in the range between 138.90 and 125.40 since mid January. Based on the daily chart, CCI is showing weakness, and price action is heading down, as all EMAs are heading south. I do not expect to see the market break the range this week, but I like to see this neutral position change. The weekly chart indicates another support at 128 level, so pay attention on it too.

2. QQQQ: The Qs broke down the 42 level a few times in the past 2 weeks, and created a support around 41. Its top range is round 45.9, and same as SPY, Qs is at the neutral position too. I would like to see Qs to be closed above 45 level if the rest of the week is bullish, otherwise, I would watch the 42 level very closely. On the weekly chart, the 200 EMA is at 43, I do not have too much expectation on this level, as it did not act as a support in the past weeks. But you never know.

3. XLF: The financia Select Sector ETF has been beaten down badly since last October. The channel is drew on the daily chart, with a range between 27.6 and 23.3. It might go down further if Fed still couldn’t bring confidence into the market (that is not in their job description anyway). So I would definitely buy it for long term investment now, but it has been a good day trading candidate. Based on the weekly chart, the 20 EMA has been acting as a resistance, so I would expect to see the price close above it to confirm the bullish trend.

The market has been giving mixed signals, and shows a lot of indecision, let’s see if the new earning quarter will do any good.

Good Luck and Happy Trading! :)