Arthur Hill, CMT

Market Timing Models – To Infinity and Beyond

Stocks turned a bit mixed the last two weeks, but the bulk of the evidence remains bullish, both long-term and short-term. Looking at the five biggest equal-weight sectors, we saw new highs in the EW Technology ETF (RYT), EW Industrials ETF (RGI) and EW Healthcare ETF (RYH) this week. Technology led in 2019 and continues to lead in 2020.

Weekend Video, Chart Notes and ChartBook

There were plenty of 52-week highs this week. SPY (large-caps), QQQ (large-cap techs), MDY (mid-caps) and IJR (small-caps) hit new highs. Five of the eleven sector SPDRs hit new highs this week, while just two equal-weight sectors hit new highs.

Market Timing Models – Short-term Test Awaits as Noise Levels Increase

It’s just the second trading day of 2020 and already the markets are setting up for a test. Stock futures are sharply lower as the S&P 500 looks set to open down around 1%. Gold, the Dollar and Treasury bonds are sharply higher as money looks for alternatives. A sharp decline in the S&P 500 could reverse the short-term uptrend and herald the much awaited correction.

Grouping and Ranking Core ETFs – Consumer Discretionary and Precious Metals Come to Life

The strong continue to strengthen and the laggards are leading short-term. Overall, this suggest that the bull market continues to broaden and pick up more converts. The S&P 500 SPDR, Nasdaq 100 ETF and Technology SPDR were leading all year and they simply extended their leads with fresh new highs this week. The energy-related ETFs were lagging all year and then surged over the last five weeks.

Market Timing Models – S&P 500 is Extended, but not Yet Frothy

There is not much change in the broad market picture. The S&P 500 SPDR hit a new high again this week and extended its uptrend. The long-term trend has been up since February and SPY has been on a tear since early October. Barring a 2.22 point decline today (Friday), the S&P 500 SPDR is set to close higher for 11 of the last 12 weeks. It is an extraordinary run (+9.71% since early October), and shows no signs of slowing.

A Boring Stock with a Bullish Theme for 2020

A theme is a fundamental trend that could influence a stock’s price in the coming months, or even years. As powerful as themes seem, they are still secondary to price action. There are many forces driving price movements and we cannot be expected to know them all.

Weekend Video, Chart Notes and ChartBook

As you can see from the lists above, there were plenty of 52-week highs this week. SPY (large-caps), QQQ (large-cap techs), MDY (mid-caps) and IWM (small-caps) hit new highs. Six of the eleven sector SPDRs hit new highs this week, while seven equal-weight sectors hit new highs.

Market Timing Models – History does not Repeat itself, but it Often Rhymes.

Today’s report will focus on the S&P 500, the current advance and a future scenario. I am focused on the S&P 500, and SPY by extension, because this index is the driving force in the stock market. It accounts for some 80% of the US equity market and is the most widely followed benchmark for US stocks. Small-caps and mid-caps are more likely to follow the S&P 500, not the other way around.

Grouping and Ranking Core ETFs – Leaders Extend Gains as ETFs in Downtrend Get Big Bounces

Strength in the US stock market is broad-based with 25 of the 46 (53%) equity-related ETFs hitting new highs over the last five days (including EFA). Of the 21 ETFs that did not hit new highs, several led the stock market over the last two weeks with big counter-trend bounces. Four energy-related ETFs were up double digits the last 11 days and XLE (+5.83%) is the leading sector over this time period.

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