Options Week Now in Rear View Mirror

With quadruple witching options expiration day now behind us we can start to focus on the general intermediate term direction of the market once again. We can now step back from the defensive mode we were in last week and start to look to position ourselves to benefit from the next market move. Pulling back to look at the weekly chart views for both the SPY (S&P 500 ETF) and QQQQ (NASDAQ 100 ETF) we can get a better feel for the longer term direction of the market. Are buyers stepping back while professionals use the current high prices as a profit taking opportunity, or are stocks still being accumulated and thus being pushed higher? The SPY, as you can see, has reestablished its uptrend started last August and is just a few points shy of following the midcap index to a new all time high. At this time there are no technical warnings or divergences to be concerned with. Money flow continues to reach up to new highs and volume has been steady. The QQQQ, while still a way from making a new high, has established a base above its 20-week average and is showing some nice support at its current levels. This base should help it maintain a steady and stable climb as the market continues to climb its wall of worry. There is plenty to worry about, including high oil prices, but remember, it’s not the news that matters, but how the market reacts to the news.