I charted the Dow Jones ETF (NYSE: DIA) this morning within the first half hour of the market opening when it was trading at $103.13.  The first glaring line I drew was the trend line of higher highs.  DIA bumped up against it yesterday and then dropped.  Although it held onto a gain for the day, the trend line showed its strength.  This remains the line to watch for now.  I expect DIA to head back down closer to its lower trend line of higher lows.  The reason to keep an eye on the top line though is that if DIA can break above it and stays for two days we could see another leg up in the rally.  This morning isn’t giving …

I charted RIG after the markets closed on Thursday, October 29, 2009, when RIG closed at $86.84.  I only went back a couple of months on this chart to just before RIG gapped up on September 8, 2009.  Just as I pointed out in my SPY chart yesterday, RIG finished the day after touching the relatively short trend line of higher lows.  SPY had the additional foreshadowing of actually closing dead on its 50 day moving average (dma).  Starting today off RIG opened on the other side of the past week’s downward sloping trend line of lower highs.  The next big test for RIG will be its 10 dma and 20 dma just a few …

I charted SPY this afternoon when it was trading at $105.33 as it sat at a level of critical technical support.  The two main indicators I like to use that are in play right now are the trend line of higher lows and the 50 day moving average (dma).  The 50 dma and the two lower trend lines are very close to each other.  I drew two trend lines to mark different trends of higher lows.  The longer one starts with the intraday low of March.  The shorter one has been a point of resistance a few times, but for the past three months has acted as support.  They are within a few points of each other now.  Those three combined are key indicators to …

I charted the year to date daily prices of the Russell 2000 ETF, IWM, late this morning when it was trading at $59.36.  It’s getting close to a key support level and is worth watching here.  Yesterday IWM broke below its shorter trend line of higher lows and is only a few cents away from the longer trend line that hasn’t been tested since it was last touched in July. 

Before trying to get in front of the trade, it might be a wiser move to wait for Williams %R to give the buy signal first.  In green I highlighted this year’s moves above oversold for the 14 and 28 day indicators.  Notice how they foreshadow a good run for IWM in each case.  On …

I charted Monsanto (NYSE: MON) just after noon today when it was trading at $74.17.  I like following MON because it tends to follow its trend lines fairly consistently (I tried to color in the trading channels to show them better, not sure if it helps) and when the Williams %R indicator moves for or against MON, the indicator tends to be a great foreshadower.  A few days ago MON broke below its trend line of lower lows, but has stayed within the second trading channel I drew.  I left the current triangle white to show I’m not as comfortable with it down there after the longer trading channel broke.

MON’s history shows it’s best to wait for it to pull above oversold in the %R indicator. …

I charted the large emerging markets ETF, EEM, late in the day on October 2, 2009 when it was trading at $37.81.  You can see the two lines I drew marking EEM’s trend lines of higher highs and higher lows.  This trading channel is narrowing and I expect the lower line to offer support again.  Aiding in that potential support is the 50 day moving average (dma) in blue.  It’s almost in line with the trend line of higher lows and has acted as support a few times this year, especially over the past two months.  On the bearish front, the 20 dma broke which could act as resistance, just as it provided support through most of April, May and the beginning of June.

Disclosure: I …

I drew two QQQQ charts this morning to show views of both the past three months and past seven months.  The seven month view includes the March 2009 low and I wanted to include that in my longer term trend line of higher lows.  I’m also including the three month chart so you can see the recent prices better along with the trend lines.

The big stand out from both is that QQQQ is nearing potential support of its multiple trend lines of higher lows.  I picked a few different starting points and they all point to close to the same area in the low $40s.  If these lines start to break we could see a big correction in tech stocks.  The 10 day moving …

Last week I wrote about the FWLT chart that looked like it had room to move higher.  I even sold some cautiously bullish puts on it based on the lower trend lines.  I was wrong.  I jumped the gun.  Soon after I posted the chart FWLT started to weaken.  I drew the same line as last week, but thinner to show how that same trend line followed through.  It acted as support off and on and then gave way. 

My naked puts (good thing I was cautious somewhat with my strike) are now in the money, but I actually think FWLT has a good chance of rebounding from here.  It’s right on the trend line of higher lows from the …

I charted Foster Wheeler AG (NASDAQ: FWLT) at 10:53 am on September 17, 2009 when it was trading at $34.75.  FWLT broke above previous resistance at the open today and climbed from there.  Although it is off its highs of the day, FWLT still looks strong.  I expect the upward movement to continue, but wouldn’t be shocked to see it come down and touch one of the earlier trend lines I drew below before taking off even more.  Volume in the first hour today was more than the whole day yesterday.  I assume some short covering added to the jump.

Disclosure: I sold naked puts this morning at the October 33 strike in a cautiously bullish move that takes the dip into account….

I charted SPY this morning at 9:47 when it was trading at 105.83 and saw resistance holding the S&P 500 index back from breaking out too far for the next few days.  I’d like to see a few percentage point drop before getting in much deeper.  Since I’m sitting on some SSO September 32 naked calls, I’d like that dip to happen sooner than later.  SPY has a little room to move higher from here, but not much compared to how much room it has to the downside.