Systematic Trading Strategies and Next Level Trading Setups
The Composite Breadth Model (CBM) turned negative on Monday (-1) and the weight of the evidence is now bearish for stocks. This development means risk in stocks is above average. Strategies that trade stocks and stock-based ETFs perform poorly when risk is above average
Market Timing Models Improve Long-term Performance Read More »
The pockets of strength are shrinking as more stocks succumb to selling pressure. The Nasdaq 100 is the strongest of the major indexes, while the Finance sector is one of the weakest sectors. Today’s report will highlight two leaders within the Nasdaq 100 and two laggards within the finance sector.
Two Holding Up and Two Breaking Down – with video (Free) Read More »
There is a clear bearish chain of events over the last few months. It all started when the Russell 2000 ETF, S&P 500 EW ETF and S&P MidCap 400 SPDR failed at their February highs in July. SPY and QQQ were well above these highs, but small-caps and mid-caps were not keeping pace
Stocks were hit hard the last two weeks with the S&P 500 SPDR (SPY) breaking below its August low. SPY also forged a lower high from July to August. Stocks and ETFs that held above their August lows are showing relative strength. With that in mind, the three cyber security ETFs stand out and one is stronger than the others.
Which Cyber Security ETF is the Strongest? – with video (Free) Read More »
SPY and QQQ remain in corrective mode, but they are both oversold after sharp declines the last nine days. These oversold conditions could pave the way for a bounce in the coming days. The risk is that SPY becomes oversold and remains oversold (continues lower). Most
SPY and QQQ broke down last week and the medium-term trends are down. That’s the negative news. On the positive side, the long-term trends are still up and both are well above their 200-day SMAs. This suggests that the current decline is a correction within the long-term
Stocks fell sharply in September with the S&P 500 SPDR (SPY) breaking below its August low. Chartists can now use this low as a benchmark low to gauge relative performance. Stocks that held above the August low are showing relative strength. This is valuable information because stocks that hold up better during declines have a better chance of moving higher. Let’s look at an example.
Finding the Leaders after a Sharp Decline – with Video (Free) Read More »
It has been a rough ride for most commodities this year and especially over the last 100 trading days (since May). Of the twelve spot prices I track, nine are up and three are down. Precious metals, base metals, lumber and grains are all down. The energy complex
Energy-related Commodities Lead, but Oil Looks Vulnerable – with video (Free) Read More »
The near-term outlook is negative with SPY and QQQ in corrective mode. Today’s report will put forth some downside projections, but take these with a pinch of salt. Or rather, take these with a handful of salt and a shot of tequila. Projections are subject to change should
A few large-caps and large-cap techs are holding up, but other areas of the market are showing weakness. Namely, the Retail SPDR (XRT) and Regional Bank ETF (KRE) are two of the weakest groups right now. These two groups are under selling pressure and this could bode ill for the broader market. Why? Because they represent key areas of the economy.
Two Key Groups Take a Turn for the Worse – with Video (Free) Read More »
It ain’t over until large-caps buckle. SPY and QQQ have yet to break short-term support. These two are holding the market up because we are seeing widespread weakness outside of a few large-caps. The S&P MidCap 400 SPDR and Russell 2000 ETF hit their lowest (closing) levels since late June. The Retail SPDR hit its lowest (closing
The Russell 2000 ETF (IWM) closed below the 200-day SMA for the first time since, well, June 1st. The last cross was not that long ago and recent crosses simply resulted in whipsaws. Truth be told, 200-day SMA crosses are not that relevant for IWM.
IWM Closes below Long-term Moving Average. Does it Matter? – with Video (Free) Read More »
There are no changes in the broad market conditions. SPY and QQQ are in short-term uptrends and their breakouts held as both bounced over the last four days. These bounces affirm short-term support and keep
The S&P 500 SPDR bounced the last three weeks, but we did not see an improvement in breadth. Weak breadth is also reflected in performance for mid-caps and small-caps, which are lagging. Even so, SPY and QQQ are in short-term uptrends and I am watching the tech sector for clues.
Breadth is Not Keeping Pace with the Bounce – with video (Free) Read More »
SPY and QQQ fell back after their breakouts and bounced off broken resistance levels. These short-term bounces affirm supports and keep the short-term uptrends alive. It is important to monitor these two because the rest of the market looks rather shaky. Breadth is not keeping pace, September seasonality is here and mid-caps are lagging.
The market looks fragile and is definitely split. Large-cap techs are leading, small-caps are lagging and mid-caps are caught in between. The long-term trends are up for SPY and QQQ as both hit new highs in July. The S&P MidCap 400 SPDR (MDY) and Russell 2000 ETF (IWM), in contrast, did not break their early February highs. They are largely range bound
Stocks surged in the second half of August with several ETFs breaking out of corrective patterns, such as falling flags or falling wedges. Even though September is a seasonally weak month, these breakouts are bullish until proven otherwise. Today’s commentary will analyze the breakout in the Technology SPDR (XLK).
The Key to the August Breakouts – with Video (Free) Read More »
The chart below shows 25-year seasonality for the S&P 500. There are three strong periods and three weak periods. The strong periods are mid March to early May, July, and mid-October to yearend (green arrows). The seasonally weak periods are January, mid-February to mid-March
According to the Stock Trader’s Almanac, the best six-month period runs from November to April. The worst six-month period runs from May to October. This is where the phrase “sell in May and go away” comes from. There is some validity to the best
Seasonality versus Simply Market Timing (Public) Read More »
The big trend is the dominant force at work and SPY remains in an uptrend since the higher high in early February. Seasonal patterns, even when strong, are secondary to the bigger trend. Seasonal weakness in September could still materialized
