ETF Investors Look To Jackson Hole

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jackson hole tetons 300x245 ETF Investors Look To Jackson Hole

ETF Investors look to Jackson Hole and Dr. Bernanke’s speech on Friday and Mario Draghi on Saturday

Global stock and ETF investors have run equities markets up to near yearly highs on the hopes for more quantitative easing from Dr. Bernanke and the Federal Reserve.  ETF investors are also looking to European Central Bank President Mario Draghi to step up and buy bonds to save Italy and Spain from high borrowing costs while the debt crisis in Greece continues to percolate.

The coming week will be pivotal for the future direction of major U.S. stock indexes and their related ETFs.

On My ETF Radar

Looking for clues to the future direction of stocks and ETFs, the S&P 500 (NYSEARCA:SPY) is instructive:

spx0826121 ETF Investors Look To Jackson Holechart courtesy of StockCharts.com

In the chart of the S&P 500 (NYSEARCA:SPY) above we see that the index is in bull market configuration but stalled at near yearly highs with the red horizontal resistance line at 1420 marking the last level of short term resistance.  The point and figure target for the S&P 500 (NYSEARCA:SPY) and its related ETF is 1550 on the index and $190 on S&P 500 SPDR ETF (NYSEARCA:SPY).  This represents a targeted gain of 9% on the index and 35% on the ETF.

spypf082612 ETF Investors Look To Jackson Holechart courtesy of StockCharts.com

Both the S&P 500 index and the S&P 500 ETF (NYSEARCA:SPY) have registered recent breakouts and are well above their blue bullish support lines which represents significant support and the demarcation line between bull and bear markets.

The S&P 500 (NYSEARCA:SPY) configuration is confirmed by the other major U.S. stock indexes and their ETFs.

The Dow Jones Industrial Average and its ETF, Dow Diamonds (NYSEARCA:DIA) is at $131, 20% below its target price of $158.

The Russell 2000 and the iShares Russell 2000 ETF (NYSEARCA:IWM) is 16% below its target price of $93.

The Nasdaq 100 Index and the PowerShares QQQ Trust ETF (NYSEARCA:QQQ) is 10% below its target price of $75.

On a technical basis, major U.S. stock indexes and their ETFs are in confirmed buy signals, in bull market configurations, but at major resistance levels.

View From The Summit

Last week’s market action was largely dominated by the “will they or won’t they” questions surrounding future action by the Federal Reserve in regard to quantitative easing.  Economic reports saw U.S. durable goods orders rising 4.2%, gains in existing and new home sales, an unexpected rise in weekly unemployment and dovish comments from the FOMC meeting minutes in which the Fed was actively discussing more quantitative easing.

Improving economic data points conflicted with the Fed minutes and uncertainty over Europe to stimulate the “what will the Fed do” guessing game.  On Friday, Dr. Bernanke said in a letter to a Congressional committee, that, “There is scope for further action by the Federal Reserve to ease financial conditions and strengthen the recovery.”

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