To The Moon

Hi everyone, it’s been a while!

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Today’s newsletter will cover the 4 major ETFs, as follows:

SPDR Dow Jones Industry Average ETF (NYSEARCA: DIA)

DIA has been trading in a tightening formation since the GFC in 2008 with a marked up support trendline (in blue) and channel resistance (in green). SKDJ is rolling over following a bearish crossover, along with a bearish divergence forming on RSI.

On the weekly, I'm focused on 2 scenarios:

1. Retest of 406.02 weekly bullish imbalance support zone

1. Lower high forming at 426.06-431.02 or 438.82-441.07 weekly bearish imbalances, which could setup Scenario 1 (if it hasn't happened) or a move even lower to fill the imbalance at 396.49.

In short, the higher timeframes are signalling danger ahead. That should shape your "thesis" for the coming months and years. If the blue support trendline breaks, be careful going long. Again, long-term trendline breakdowns are bearish longer term!

Invesco QQQ Trust, Series 1 (NASDAQ: QQQ)

QQQ has been trading in an ascending channel since the GFC in 2008. Bearish divergence is forming on RSI and SKDJ is rolling over following a bearish crossover several months back. Be careful going long the indices during this period. From a higher timeframe perspective, I'm looking for a move back down into the quarterly bullish imbalance at 387.98-395.34.

For now, I am fixated on several scenarios:

1. Breakdown and close below 465.74 - this should open up a massive range down into 447.53-447.90 support.

1. Dead cat bounce back to 501.35 at the very least to form a lower high, given the extreme oversold state of the market in the short term.

If we lose 387.98 and the channel breaks down, we could see a much, much, much larger move down over the next few years.

SPDR S&P 500 ETF Trust (ARCA: SPY)

SPY broke down from the rising wedge pattern and is now trying to find support in the weekly bullish imbalance zone. Weekly chart SKDJ just saw a bearish crossover, suggesting more downside could come imminently. It’s also tough to ignore the bearish divergence that’s been forming on both the monthly and weekly charts.

However, before that, we could be seeing a dead cat bounce to form a lower high. 583 or so is possible before a move lower. Lower timeframe SKDJ is forming a bullish crossover, suggesting short-term reprieve before lower.

I’m watching the 545 level closely as it aligns with a trendline retest (in green). If this level fails, then we have a lot of room lower back into the blue long-term support trendline. We could possibly see 479.98 (2021 ATHs) be retested once more.

iShares Russell 2000 ETF (NYSEARCA: IWM)

IWM’s monthly SKDJ is rolling over following a bearish crossover, with a bearish divergence forming on RSI as well. I’m watching the RSI support trendline closely - a breakdown of that trend could precede a larger dump.

Longs present a poor reward at current levels unless we can break above the red resistance trendline. I’m watching 196.16 and the weekly bearish imbalances overhead for a reversal. The bullish crossover on the daily SKDJ is a short-term bullish development though... keep your eyes peeled on that!

Over a longer time period, I am expecting IWM to head back towards the monthly bullish imbalance at 181.76-187.53, where it should catch a larger bid.

Summary

So, what is the commonality between the 4 charts? All 4 charts have SKDJ bearish crossovers and RSI bearish divergences on the higher timeframes, suggesting a larger reversal is on the horizon. This suggests that any moves up to higher timeframe resistances/imbalances will likely be faded once the imbalance is retested from below, or filled.

In the current market, it is probably wise to be cautious and not turn into exit liquidity for institutions. Watch the multi-year support trendlines across the 4 ETFs. Should these major trendlines break, the likelihood of a larger correction, and even possibly a crash, is there. Don’t discount it! Narratives follow price in many cases.

In early-2021, I was sharing with my friends about how unwise it was to be thinking about allocating large segments of the market at severely overinflated valuations. In 2025, I am now singing the same tune. It pays to be careful and to practice capital preservation in the current climate.

$SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ(QQQ)$ $SPDR Dow Jones Industrial Average ETF Trust(DIA)$ $iShares Russell 2000 ETF(IWM)$ $Apple(AAPL)$ $Tesla Motors(TSLA)$

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