Systematic Strategies and Next Level Technical Analysis
Analysis Archives (>6 months old)
Stocks did the old pop and drop with the market surging Monday-Tuesday last week and then falling the next four days. Many ETFs moved to new lows, but some managed to hold above last week’s lows. Several tech and bond related ETFs hit fresh 52-week lows, which
Stocks got a big oversold bounce the first two days of October, but I am treating it as a counter-trend move within a bigger downtrend and bear market. Adding fuel for the bulls, the Dollar
Stocks got a big bounce the last two days, but this is still considered an oversold bounce within a bigger downtrend. SPY, QQQ and IWM fell sharply the last two weeks of September and were ripe for such a bounce. Overall, the
The Dollar finally took a breather from its rapid ascent with a four day pullback and we also saw the 10-yr Treasury Yield fall from around 4% to 3.6%. The Dollar represents the risk-off trade so the pullback facilitated a bounce in
The Composite Breadth Model remains bearish with all five inputs negative and yield spreads are on the rise as the CCC spread widened to a new high. Taken together, this means the Market Regime is bearish for stocks and risk is above average. Bonds and gold do not offer alternatives
The bears remain in control of the stock market and they are expanding their territory with breakdowns in energy, a clean energy and biotech. Stock-based ETFs are still part of the market and this became abundantly clear as all stock based ETFs in the ETF Master List fell over the last
The Fed has come and gone, and the ugliness in the markets remains. Stocks fell sharply on Wednesday as SPY lost 1.79%. Bonds bounced with a sequence of sell-the-rumor (rate hike) and buy-the-news (actual hike). Sell short on the prospect of rate hikes and cover when the big
The Composite Breadth Model remains bearish with all five inputs negative and the yields spreads are on the rise, especially junk spreads. Taken together, this means the Market Regime is bearish for stocks
Volatility remains above average in the markets and now we have a Fed meeting to contend with. There is only one thing to do when the Fed meets: turn off your news feed and wait a few days for the dust to settle. Knee jerk reactions are
This is one tough market, and I am not just talking about stocks. Non-stock alternatives usually emerge during bear markets, but we are seeing weakness in oil, copper, gold and “safe-haven” Treasury
The weight of the evidence remains bearish for stocks and volatility is above average. Throw in elevated yield spreads and a hawkish Fed, and you have a bearish Market Regime for stocks. Bear markets are
Stocks surged the last four days with another big move. It seems that there is no such thing as “average” anymore as we are seeing big moves both up and down. The chart below shows SPY with the 5% zigzag in red. This red line only
After becoming very oversold on Tuesday, stocks bounced on Wednesday with the major index ETFs gaining around 2%. Today’s report will put these bounces into context. We will show the difference between bullish setups in harmony with the bigger force and
Stock market volatility remains high as strong bouts of buying pressure are answered with strong bouts of selling pressure. Strong buying pressure and broadening upside participation turned the thrust models bullish in August, but these signals
The pickings within the stock market are slim and the pickings outside the stock market are also slim. There are far more downtrends out there than uptrends and this limits the choices for trend-following and those looking for pullbacks within uptrends. SPY and QQQ are
SPY is testament to the volatile world we live in right now. The ETF surged some 14% in 22 days (.64% per day) from July 22nd until August 16th and then fell 8% the last 11 days (.73% per day). The fall, so far, is sharper than the rise. The reversal occurred with
Stocks moved sharply lower the last two weeks with ten of the eleven sector SPDRs declining and almost all industry group ETFs falling. Energy-related ETFs and the Uranium ETF were exceptions. The long-term trend for
Stocks were hit hard again over the last two days and are now short-term oversold. While short-term oversold conditions could give way to an oversold bounce, we saw some important failures near falling 200-day SMAs over the last two weeks. These failures are long-term negative so I would not read too much into an oversold bounce
The weight of the evidence remains bearish for stocks, but SPY became short-term oversold after a sharp decline the last five days. Even though this could give way to a bounce, the bears reasserted themselves and risk looks above average for stocks. Today’s report will
The Composite Breadth Model hit its moment of truth and failed to turn bullish as stocks moved sharply lower the last five days. Correlations rose as the vast majority of stock-based ETFs declined. Only energy-based
Stocks fell sharply the last two days and these declines were enough to reverse the short-term uptrends in many stock-based ETFs. In particular, the short-term uptrends reversed for SPY and QQQ. This is a big deal because the Composite Breadth Model was
The short-term uptrends are dominating the landscape, or at least this seems to be the case. SPY is below its falling 200-day SMA, but is up some 16% from its mid June low. It is a strong move that has yet to be reversed. In fact, there are dozens of ETFs with similar characteristics:
The thrust that began in mid July extended into mid August and triggered bullish signals in the Thrust Breadth Models. The Trend Models, however, remain bearish, as does the 5/200 day SMA cross for the S&P 500. At best, the market is split and more work is needed to turn bullish. At worst, the market is overbought
Market and ETF Report – SPY Nears 200-day, IWM Triggers, Energy ETFs Hold Breakouts, Agriculture ETF Breaks Out (Premium)
Stocks surged on reports that inflation was less than expected. Bonds did not. This is interesting because bonds are supposed to be more vulnerable to inflationary pressures. The news, however, is just the reported news we can never be sure of the true reasons for the price moves.
The Composite Breadth Model remains bearish and SPY is in a long-term downtrend, but the short-term trend is up and has yet to reverse. Today’s video will mark some short-term support levels to watch for a few key ETFs and the line-in-the-sand for a short-term breadth indicator. We are seeing sharp counter-trend bounces in a
We are seeing more bullish Trend Composite signals, but the weight of the evidence remains bearish for stocks. Of the 274 ETFs in the master list, there are 22 ETFs (13%) with positive Trend Composites (uptrends) and 152 (87%) with downtrends. The uptrend signals are
Today’s report starts with some short-term breadth indicators. One of the three triggered a bullish breadth thrust, but the other two have yet to show the upside participation needed for a thrust signal. They have yet to cross that line and are actually looking short-term
Stocks surged in July and this surge was enough to trigger a bullish breadth thrust in the S&P 500. However, we have seen this movie before with bullish breadth thrusts that failed in late March and late May. The Composite Breadth Model needs more than just a bullish breadth thrust to turn the corner. Elsewhere, yield spreads
Despite a big advance in June, the Market Regime remains bearish and risk is above average for stock-based ETFs. In addition, the Trend Composite is negative for the vast majority of stock-based ETFs. A few ETFs related to clean energy, fossil fuels, consumer staples,
Today’s report will update Dow Theory analysis from last month, recall an old adage from Marty Zweig and show that only two assets are holding up. The Dollar remains very strong, which means the opposing
The Composite Breadth Model remains in bear mode, yield spreads show stress in the bond market and the major index ETFs are in downtrends. Other groups are not picking up the slack because most precious metals, industrial
Stocks became oversold after a sharp decline in June and the bounced to varying degrees. Some of these bounces were quite sharp (ITB, IBB) and some ETFs simply consolidated (SPY, KRE). Almost all ETFs are in downtrends and this means the bounces are considered counter-trend
After becoming very oversold in mid June, the major index ETFs are in the midst of oversold bounces or consolidations over the last three weeks. Predicting the extend of a bounce is tricky, but the current bounce since mid
Cracks in the stock market began to appear in the second half of 2021 and spread to large-caps in early 2022. Defensive groups within the stock market were holding up, but got hit hard in June. Industrial metals and agricultural commodities were holding
My screen for today’s price action is a sea of red right now. Stock futures are modestly lower, energy futures are lower, gold is slightly lower, industrial metals are sharply lower and agricultural commodities are sharply lower. The US Dollar Index is the only thing higher and it is trading at a new high
Today’s report to put trend and volatility together so we can identify the best conditions, the worst conditions and the questionable conditions. Most of us know that current conditions are the worst for stocks because we are in a bear market with high volatility. We will chart volatility to show when it is deemed high and
Weakness is widespread throughout the stock market, and other markets. The Composite Breadth Model is and remains bearish. fewer than 20% of S&P 1500 stocks are above their 200-day SMAs and yield spreads show stress in the credit markets. Almost all stock-based ETFs are in downtrends and most of the alternative ETFs are also in downtrends (bonds, gold, silver, the
Stocks bounced the last five days, but these bounces are considered counter-trend moves within bigger downtrends. One of these counter-trend moves will result in a trend reversal, but this is not the case yet because the weight of the evidence remains bearish for stocks. The first indicator window below shows
As noted in Tuesday’s report and in Wednesday’s video, the majority of ETFs in the Master List (274) are in downtrends. There are a few groups holding up, but even energy and agriculture were hit with selling pressure here in June. Mr Market is dazed, confused
The major index ETFs and big sector SPDRs extended their downtrends and recorded fresh 52-week lows over the last few days. New lows were also seen in most tech and consumer discretionary ETFs. The Composite Breadth Model reflects the broadness of downside participation and widening yield
There are a lot of downtrends out there and not just stock-based ETFs. The vast majority of stock-based ETFs are in downtrends with Trend Composite values in negative territory. ETFs related to industrial metals, precious metals, bonds and non-Dollar currencies are also in downtrends
Today’s commentary will dive into Dow Theory and show some overlap with Elliott Wave. We will show the phase/wave counts for the last bear market and then make an attempt to label the current
The major index ETFs extended their downtrends with a vengeance over the last five trading days. It was a most exceptional period because almost everything declined the last five days – and I do mean everything. 52-week lows expanded
It was a “sell everything” moment the last four days as stocks, bonds, commodities and non-Dollar currencies declined. The Dollar Bullish ETF (UUP) rose 2.82% the last four days and the Corn ETF (CORN) was up .46%. Those are the only two ETFs
Small-caps are outperforming large-caps over the last one to two weeks because large-caps stalled and small-caps continued higher. Even so, I am not following the siren song of small-cap relative strength and am more concerned with short-term relative weakness in
The major index ETFs are in the midst of a bounce, but this bounce is still considered a bear market bounce. The bigger trends are still down for SPY and QQQ, the Composite Breadth Model is negative and yield spreads are elevated. Despite bullish breadth thrusts in late May, the percentage of stocks above their 200-day SMAs
Today’s report will start with the Composite Breadth Model and some words on the Market Regime because this is the dominant force at work for stocks and stock-based ETFs. Some stock-based ETFs are featured in this report because they are either in uptrends on the price chart, have positive Trend Composites or held their January-March lows (did not break down).
Today’s report starts with bonds, the Dollar and gold. I am not, however, going to tie moves in one asset to movements in another. There are some relationships at work, but relations and correlations change and sometimes do not work out as expected. Instead, I will simply analyze
The major index ETFs got big bounces last week, but these are still oversold bounces within bigger downtrends and within the context of a bear market. Despite some breadth thrusts, the Composite Breadth Model remains bearish and yield spreads remain very elevated. Gold is struggling to hold its breakout as the Dollar and