DIA and SPY

Above are the weekly charts of the Diamonds (DIA) and Spiders (SPY). We can see right off the bat that support is being or about to be tested. With earnings season under full swing, and the international front still taking the front burner, it will be time to tell what these indices will do. While approaching support, buyers are still wary of what the short-term future holds for equities. Caution is the rule of thumb at this juncture. If prices break support levels, look for massive amounts of selling with pick up in short interest.

Also, higher temperatures across much of the US as well as heading in to Europe should push utilities higher. We are heading in to the dog days of summer and a international situation brewing. Remember, not only is the situation with Israel and Palestine happening, we also have the continued nuclear threat from Iran and North Korea. Do not expect these issues to be over anytime soon. Again, caution is the main idea here.  ¶ 8:46:00 AM