Dozens of high flying stocks and ETFs are down double digits from their February highs, but chartists should put these declines into perspective when analyzing the charts. The ARK Innovation ETF (ARKK), the Clean Energy ETF (PBW) and the Solar Energy ETF (TAN) declined over 30% from their February highs to their March lows, but […]
Today’s video starts with the corrections in QQQ and IWM, and the resilience in SPY. Techs started the corrective process and small-caps joined this week, but large-caps in the S&P 500 remain immune. Nevertheless, QQQ has a flag breakout working and shows some short-term relative strength. Stocks could find another wind from two bullish seasonal
The market regime remains bullish, but we are seeing corrective price action over the last few months. The Nasdaq 100 ETF started it all off with a sharp decline from mid February to early March. IWM got involved this week with its biggest fourth decline greater than 9% since March 2020. SPY has largely avoided the correction fray and remains the strongest of the big three.
Timing Models – IWM Joins the Correction Fray, QQQ Firms, Two Bullish Seasonal Patterns Read More »
The market remains defensive overall. There were flag breakouts in a number of tech and growth ETFs last week and these breakouts are failing this week. Once again, the tech and growth ETFs are leading the way lower. Even though these ETFs are down sharply over the last six weeks, the declines still look like corrections within bigger uptrends. The mid March highs provide the first resistance levels to watch going forward.
This commentary was originally posted on Wednesday, March 17th, in PDF format. Today I am replacing the PDF with chart images on a web page. Some of the text has been adjusted, but the commentary/charts are largely the same as on Wednesday. These charts cover the massive moves in tech-growth ETFs over the past year, the interest rate debate, Chinese ETFs firming in reversal zones and the Brazil ETFs surging off the 200-day.
I wrote about the Biotech ETF (IBB) on February 28th as it pulled back from a new high. The pullback was viewed as a correction within the bigger uptrend, but the correction extended further than expected. At the time, I drew a falling wedge on the chart and marked resistance with the red line at 163.
IBB: Still a Correction within a Bigger Uptrend (Free) Read More »
QQQ and the tech-related ETFs triggered flag breakouts last week and these breakouts were challenged with a pullback this week. Some breakouts failed (IGV) and some are at their moment of truth (IPAY). Today’s video focuses on trailing stops and breakout zones for several of these.
We finally got a bit of a shake up this week as oil fell sharply on Thursday. We also saw big declines in the Nasdaq 100 ETF and Russell 2000 ETF. It was basically triple shock Thursday with small-caps, large-techs and oil getting hit hard. Tech and growth related ETFs were also hit hard as money moved out of the high-beta end of the market.
There are lots of flag breakouts here in March. Some triggered in early March, some last week, some this week and some are still working, which means price is still near the breakout zone. There were short flag/pennants that lasted a week or so (KRE), shallow flags (IJR), falling flags that lasted three weeks (SPY) and sharper falling flags that lasted four weeks (QQQ, IBB).
As its name suggests, multiple timeframe analysis looks at two or more timeframes to find a setup. Typically, the longer timeframe is used to define the long-term trend and set the trading bias. The shorter timeframe is then used to find setups in harmony
Applying Multiple Timeframe Analysis to the Healthcare SPDR (Free) Read More »
Stocks perked up this week and we saw flag breakouts in several ETFs. Small-caps led the charge with IWM hitting a new high. QQQ even rebounded with a breakout, but is still lagging year-to-date. Strategically, the Composite Breadth Model remains in bull market mode. Tactically, the breakouts are holding and we will show how to monitor SPY and QQQ going forward. It was also a big week for Utilities and Consumer Staples,
SPY and IWM recorded new highs this week and continue to lead the broader market. Even though QQQ and XLK are underperforming this year, the old school sectors held strong and propped up SPY. After short pullbacks into early March, stocks caught a bid this week and we are seeing flag breakouts in
There are a lot of pullbacks to deal with today. Some pullbacks are shallow, some are deep and some are in between. Often, the bigger the advance, the deeper the pullback or retracement. Despite some big percentage declines, most of the pullbacks are normal in retracement terms (33 to
Two items are dominating the news right now: the rise in interest rates and decline in tech stocks. Are rising rates really an issue for tech stocks? The charts suggest that the evidence is mixed, at best. In fact, it is not very hard to find periods when tech stocks rose along with sharp rises in the 10-year Treasury yield.
Tech Stocks, the 10-year Yield and Questionable Narratives (Free) Read More »
Despite an increase in intraday volatility the last few weeks, the recent pullback is actually quite tame, especially for the Russell 2000 ETF and S&P 500 SPDR. QQQ bore the brunt of selling pressure and the Nasdaq 100 Breadth Thrust Model turned bearish. I am not concerned with this signal because the S&P 1500 Thrust Model remains bullish. Today’s video will show backtest results
The long-term evidence remains bullish, but the major index ETFs have moved into corrective mode of varying degrees. The S&P 500 SPDR and Russell 2000 ETF are in the midst of shallow pullbacks, while the Nasdaq 100 ETF is leading the way lower with a sharp pullback. Downside participation was so strong in the Nasdaq 100 that the Breadth Thrust
Even though ETFs related to small-caps, mid-caps, industrials, finance and energy are performing well and not part of the correction process, a big portion of the core ETF list are in some sort of pullback or correction over the last few weeks. 48 of the 119 ETFs in the core list are down over the last 22 trading days (since January 29th) and 22 are down more than 5%.
With a pullback led by QQQ and the high flyers, several ETFs have become short-term oversold in a longer term uptrend. In Dow Theory terms, the primary trend for these ETFs is up and the secondary trend is down. A secondary downtrend within a primary uptrend is considered a correction within that uptrend and a possible opportunity.
Secondary Downtrends in Primary Uptrends Create Opportunities (IBB Example) (Free) Read More »
Stocks corrected over the last two weeks with QQQ leading the way. IWM held up the best and RSI moved into the oversold zone for SPY. Today we will look at previous instances when RSI became oversold for SPY. Some indicators are pointing to a multi-week correction (NDX %Above 50-day), but we also have the turn of the month upon
The long-term evidence (primary trend) is bullish, but we are seeing some short-term weakness (secondary trend). This is especially true in the Nasdaq 100 and Technology sector. SPY is holding up better because the Finance, Industrials and Communication Services are picking up the slack. The table below summarizes the broad market environment using the
February is turning into a big month for cyclically oriented ETFs. These include: Copper Miners ETF, Metals & Mining SPDR, DB Base Metals ETF, Oil & Gas Equipment & Services ETF, Oil & Gas Exploration & Production ETF, Airline ETF, Transports ETF, Industrials SPDR, Regional Bank ETF, S&P SmallCap 600 SPDR, S&P MidCap 400 SPDR and Semiconductor ETF. The lists below shows ETFs with big gains over the last 17 trading days (February).