Systematic Trading Strategies and Next Level Trading Setups

Market/ETF Video – CBM Turns Negative, Yields Spreads Widen, Bonds Rise as Safe Haven Trade, Tech ETFs Show Relative Strength, but… (Premium)

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Market/ETF Review and Outlook Video

The weight of the evidence is bearish for stocks. The Composite Breadth Model turned negative on Monday, yield spreads widened significantly over the past week and SPY broke wedge support. Risk for stocks and stock-based ETFs is above average right now. This includes groups that held up and showed relative strength, such as tech based ETFs. QQQ, XLK and some others have pullback patterns working, but I would respect the immediate downtrends until conditions improve. Elsewhere, money is moving into bonds as a safe haven and precious metals as an alternative. The Dollar broke short-term support, but could catch a bid because it is a safe haven currency.

Broad Market Analysis

  • Composite Breadth Model is Bearish
  • SPY Breaks 200-day and Wedge Support
  • Junk Bond ETF Breaks Pennant Support
  • Yield Spreads Sharply Widen and Show Stress
  • 20+ Yr Treasury Bond Remains within Trading Range
  • Dollar Breaks Short-term Support, but Could Become Safe-haven
  • Gold Breaks Out as Dollar Falls (plus PLTM, SLV)
  • Gold Miners ETF Gets Breakout and Outperforms (GDX, SIL)
  • Oil Breaks Triangle Line and Tests Support (USO)

ETF Trends, Patterns and Setups

  • QQQ and XLK Show Relative Strength, BUT…
  • Semis, Software and Cyber Pull Back (SOXX, IGV, CIBR)
  • Video Games eSports ETF with Normal Pullback (ESPO)
  • Communication Services SPDR Tests Breakout Zone (XLC)
  • Home Construction ETF Forms Corrective Wedge (ITB)
  • EW Consumer Discretionary and Retail Lead Lower (RCD, XRT)
  • Information in the Regional Bank ETF Chart (KRE)
  • Aerospace-Defense and Water Pull Back with Market (PPA, PHO)
  • A World Without Trends (XLV, XLP, PBJ, XLU)
  • Copper and Base Metals Remain in Pullback Mode (CPER, DBB)
  • Energy ETFs Trending Lower (XLE, XOP, FCG, XES, AMLP)
  • Biotech ETF Trending Lower (IBB, XBI)
Thanks for tuning in and have a great day!

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