$$ Weekly Stock Report

Jan 4-8, 2010
For annotated charts of $SPY and $QQQQ, please go here.

1. SPY

Price remains above the neutral zone and above the trend line.

Momentum: The 45-day RSI moving average is well above 50 at 57.89, indicating a strong uptrend despite the fact that RSI has displayed a tight range between 50 and 60 for nearly 2 months. Recently, an old bear divergence line was broken -- often this produces an acceleration of the uptrend but not here. Yet.

Volume: Accumulation/distribution is relatively flat, with the moving averages bunching together. This type of bunching can produce an explosion either way. The 21-day average remains slightly above the 55-day average.

Outlook: The consolidation pattern could last awhile. Not a horrible time for entry, although I'd prefer to wait for a pullback. Overall, the picture remains bullish.

2. QQQQ

Price has stalled at the outer Keltner Channel (50,4,25), and remains well above the trend line. Normally, it's better to enter near the trend line, or near/within the neutral zone.

Momentum: RSI broke through old bear divergence in making a recent 3-month momentum peak, but made new bear divergence in doing so. The 45-day average exceeds 60. RSI has not dipped below 38 for the entirety of the 9 month chart. All of this depicts a strong uptrend.

Volume: Regarding the averages, 3 > 21 >55 which suggests a healthy uptrend, but not usually the correct time to enter.

Outlook: Prudence suggests waiting for a pullback before entry.