Now on to GLD, the gold ETF and there isn't that much to say here. As indicated above (click to enlarge), it appears that GLD is trapped (that is a good thing for those of us who own it) in a rising channel and as long as that's the case, I see no reason to alter my bullish view. Adding to any long position at this level would not be a bad idea with a clear stop on that added part at 62.4, below the local low established on 3/5.

TLT, shown above (click to enlarge), has on the other hand behaved according to script ("safely on its way to 90") and even spiked above 91 on 2/27, that most turbulent of trading days (it was the late 90s all over again, computer glitches and all). We're now in the middle of a holding consolidation pattern, what looks to be a pennant. So I would say stay long, this thing could go testing that 91.80 high established on 12/1/06. However should the pennant break down, all bets would be off. A good exit point (and sell stop) would be below the 20-day simple moving average at around 88.9.

The tsunami that hit the market did affect the ETFs mentioned in this blog, namely TLT, GLD, USO and PBW although in different ways as could be expected.

Let's start with the one that drowned (so to speak) in the turmoil: PBW, shown above (click to enlarge). After breaking above its 200-day simple moving average on 2/14, it kept going up, even surpassing an important previous resistance at 19 on 2/26 paving the way to greater things. Then 2/27 happened and a total collapse took place where all previous resistance points that should have acted as support caved in. I did not give any exit points in my previous entry regarding this PBW position and I apologize for that. However (and that is no excuse) my retrospective exit point is about where the ETF is trading now, a little above 18. So anybody still long the stock and open to the possibility that the 2/27 implosion was but an anomaly and will be quickly reversed, should put a sell stop below 18 and wait and see. For the record, I'm as of now 100% agnostic regarding the fate of both PBW and the market as a whole.

(Click to enlarge)

TLT has broken above its 50-day moving average and seems to be safely on its way to at least 90 at which point we'll have to reevaluate.

(click to enlarge)

PBW, the clean energy ETF is showing an interesting pattern having just broken (decisively?) out of its 8 months range of 16.5-18.5. It has also moved above its 200-day moving average.
If it can make it above 19, 21.50 would be the next logical resitance but we'll worry about that then.

I'm a little late to the party here but TLT did actually rebound off its 200-day Moving Average at around 87 as shown on the chart above (click to enlarge) and as envisioned in a previous blog entry. Now is it a real bounce en route to bigger better things (as in new highs above 91) or is it something else (how about the right shoulder of a Head and Shoulder formation), only time will tell. But it can't hurt to be long here with a clear exit point below 87.

As expected, USO did bottom out at 42.56 on 01/18/2007 and strongly rebounded from there. It’s up 5.50 dollars since I recommended buying it two weeks ago and it may be at or nearing the end of this particular move. In other words, taking profits at this level (a little below 49) would not be, in my humble opinion, a horribly ill-advised trade for the reasons presented below. It goes without saying that, should all the resistance levels be broken, re-entering the position is always an option. My reasons are as follows:

USO is getting close to that blue falling resistance line shown on the chart above (click to enlarge). It’s also closing in on previous support at around 50 (previous support often becomes resistance). The 14-day RSI is almost at its previous high of 60, the level it reached before USO's collapse. Finally, to add to the weight of evidence, the last few days of the rally have seen decreasing volume.

Nothing really new on the TLT and GLD front.

For a time, it looked like the alternate scenario (short term bearish) described in the previous post might come to pass but after a quick dip to 60, GLD is back to where it was. A decisive breakout above 64.55 is still needed for the strong bullish scenario to play out.

TLT is still hovering above support at 87 so no signal either way there.

One of my trading mentors used to often yell "Never try to catch a falling safe" while nervously pacing the trading floor. I've also heard it as "never try to catch a falling knife". Either way, the saying applies perfectly to USO, the oil ETF whose chart is shown above (click to enlarge).

With that wise advice in mind though, it seems to me that buying some USO here would constitute a low risk/ high reward play. The RSI is in oversold territory (around 20) and turning up. Today we tested yesterday's low below 43 before closing above 43 on humongous volume (volume the past few days has been about 5 times normal volume). Also, for those Japanese Candlesticks lovers out there, yesterday saw a bullish engulfing pattern.

All this to say that now would be a good time for USO to stage some type of rebound. Sentiment-wise, unless OPEC annouces a production increase I don't see how the news could get any worse at this point.