The four indexes were mixed this week; three of them hit fresh 52-week highs and one of them broke below support. The trend remains higher for all the averages but there is a significant divergence occurring between one index ETF and the other three.

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S&P 500 SPDRS (NYSE:SPY) ETF, representing the S&P 500 index, made a fresh 52-week high this week. SPY remains in a strong uptrend with the main trendline - going back to October - intersecting just below $132. Since the start of the year, though, SPY has been moving higher in a fairly tight trend channel. That channel can be watched for early signs of a correction or as a profit-taking signal. Channel support is at $135.25, with a breach below indicating a likely retreat toward the longer-term trendline. Additional support is at $130. The price has recently been moving along the upper band of the channel. If this continues SPY could hit as high as $140 by next Friday, as this is the current projection based on the channel. (For related reading, see The Utility Of Trendlines.)

DJ Industrial Average (NYSE:DIA) ETF also made a new 52-week on Wednesday. DIA also remains in a strong uptrend with the trendline - which began in October - intersecting at $126.75. Further support is at $125. The rate of upward acceleration is definitely slowing over the last couple weeks, indicated by the wedge-like formation that is currently developing. If the ETF moves above $131 next week, it would show the trend is accelerating again ($131 is more likely to act as resistance next week if approached). On the other hand a drop below the wedge low (currently $129), may be an early signal of a potentially larger decline into the longer-term trendline. (For related reading on ETFs, see 5 ETF Flaws You Shouldn't Overlook.)

PowerShares QQQ (Nasdaq:QQQ) ETF, representing the Nasdaq 100 index, had another very strong week putting in a fresh 52-week high on Friday. That high slightly eclipsed the upside target provided in last week's market summary. The uptrend is not in any danger at this time, as the trend will remain higher even in the event of a steep correction. The upward trendline that began in October does not intersect until near $58. Since December, though, there is another trendline that can be used as a profit-taking signal if it is breached. At present that trendline intersects at $63.85. A drop below that level means the aggressive leg of the trend is likely over, even though the overall trend remains higher. There is not much in the way of support until $62.50 and significant support at $60. The trend is up though, and with the ETF hitting $65 on Friday, the upside target is $66.

Russell 2000 iShares (NYSE:IWM) ETF, representing the Russell 2000 index, finished down on the week and also penetrated support. Since early February the ETF has been moving sideways between $83.31 and $81. The $81 area was support but was broken on Friday, indicating a downside target of $78.70. This is very near the 50-day moving average and also quite close to the trendline that began back in October. If the price moves above $83.31 the target is $85.50. At this time the breakout higher (above $83.31) is not likely as IWM has been relatively weak compared to the other indexes recently. The break below support is significant, especially since the index was unable to rally in recent weeks while the other indexes pushed higher. (For more on moving averages, see Simple Moving Averages Make Trends Stand Out.)

The Bottom Line
Three ETFs: SPY, DIA and QQQ all remain in strong uptrends. Trendlines and support levels can be used as profit-taking signals, as a breach of these levels shows something may be changing. The trend is up, though, and these three indexes have not shown signs of weakness yet. IWM on the other hand broke below support this week while the other indexes pushed higher. This signals IWM is relatively weak compared to the other indexes at the present time.

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At the time of writing, Cory Mitchell did not own shares in any of the companies mentioned in this article.

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