On the stock side, Facebook’s ($FB) reaction to earnings puts us in a great spot with our current position. If the price action fails to hold above the 10-day MA, then we will likely be out with an 18% gain.
After breaking out above $22 on big volume last week, United States Natural Gas ETF ($UNG) looks to be in pullback mode after breaking down below the 20-period EMA on the hourly chart. We look for $UNG to potentially touch the rising 10-day MA within the next day or two, which could provide us with a low risk entry point to climb aboard an explosive uptrend.
Emerging markets have taken a beating over the past few months and could potentially offer some decent short setups down the road. The monthly chart below of the inverted ProShares Short MSCI Emerging Markets ETF ($EUM) shows the big volume breakout above the 10-month moving average, which is close to a 200-day moving average.
All major averages except for the Nasdaq Composite are still below the 50-day MA. However, all averages are still trading above the last major swing low, so the uptrend (in our opinion) is still intact. The daily chart clearly shows that the Nasdaq Composite is in much better shape than the S&P 500.
The recent breakout in the Natural Gas ETF ($UNG) is just about the only bullish price action we see from our scans. On the weekly chart below, $UNG cleared the prior highs of 2013 on big volume.
Stocks were hit hard on Friday, with all major averages averages closing at least -2.0% lower on heavy volume. The heavy volume selling produced back to back distribution days in the S&P 500 and Nasdaq Composite.
The second setup is in $P, which has pulled back on light volume after a big volume breakout. Yesterday’s reversal makes for a clean GONG setup (go or no go). If this setup triggers the price action should move out right away. The stop is fairly tight, as Thursday’s low should not be violated.
After a strong move off the lows of the base, Guggenheim Solar ETF ($TAN) pulled back to the rising 10-day MA on Tuesday and formed an inside day on Wednesday with light volume.
$FONR is a potential entry over the hourly downtrend line and yesterday’s high. This will put the action back above the 20-day EMA. There was strong volume on the move up, with one day of stalling at the highs and one day of selling (last Wednesday). Look for the volume to pick up on a move above $22.
Let’s run through a quick example of MTF analysis in SPDR S&P Oil & Gas Exploration & Production ETF ($XOP). Starting with a monthly chart with at least 10 years of data or more (if possible), we see that $XOP stalled at all-time highs a few months ago.
