Systematic Strategies and Next Level Technical Analysis

Market/ETF Video – Large-caps Lead, High-Beta and Small-caps Lag, Key Supports to Watch going Forward (Premium)

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Market/ETF Review and Outlook Video

The Composite Breadth Model is bullish, but the market is quite split and I am focused on the swings of late. In particular, the upswing since mid March. Large-caps and high-quality stocks are leading this upswing, while small-caps and high-beta are lagging. This suggests a rather diminished appetite for risk. Even so, most ETFs are in short-term uptrends since March and I am focused on the early April lows for signs of a reversal.  

Broad Market Analysis

  • Composite Breadth Model is Positive
  • %Above 200-day SMA Indicators Show Split Market
  • BBB and Junk Bond Spreads Sharply Narrow
  • 20+ Yr Treasury Bond ETF Remains Range Bound
  • Dollar Swings Lower (UUP)
  • Gold Grinds Higher after Becoming Overbought (GLD)
  • Oil Consolidates at Resistance (USO)

ETF Trends, Patterns and Setups

  • Choppy Uptrend for the S&P 500 SPDR (SPY)
  • SPY Becomes Short-term Overbought and Remains So
  • Watching Upswings in the S&P 500 EW and Small-cap Growth ETFs (RSP, IWO)
  • Defensive Groups Extend on Breakouts with Big Moves (SPLV, XLV, XLP)
  • Aerospace & Defense ETF Nears New High (PPA)
  • QQQ and XLK Consolidate after Big Advances
  • High-Beta ETF Holds Upswing as ARKK Stalls (SPHB, ARKK)
  • Cloud Computing and Internet Struggle to Hold Breakouts (SKYY, FDN)
  • Fintech and Mobile Payments Break Out (FINX, IPAY)
  • Semis and Cybersecurity Stall as Software Extends (SOXX, CIBR, IGV)
  • Biotech iShares Extends as Biotech SPDR Breaks Out (IBB, XBI)
  • Small-caps are Seriously Underperforming (IWM, IJR)
  • RCD, Retail and Housing Maintain Upswings (RCD, XRT, ITB)
  • Palladium and Copper Get Break Outs (PALL, CPER)
  • Platinum ETF Leaves Gold in the Dust (PLTM)
  • Gold and Silver Miners ETFs Remain Overbought (GDX, SIL)
Thanks for tuning in and have a great day!

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It remains a tale of two markets. Large-caps and large-cap techs are leading, while small-caps are lagging. The chart below shows QQQ exceeding its early March high in mid March and SPY exceeding this high last week. IWM remains some 7% below this high. The performance differentials since March 1st are also large. QQQ is up 9%, SPY

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The stock market is mixed, very mixed. The tape is bearish because the Composite Breadth Model is negative, but large-caps are holding up because the 5-day SMA for the S&P 500 is above the 200-day SMA. Yield spreads remain elevated and show stress

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Market and ETF Report – Breadth Remains Weak, Large-caps Holding Up, Consumer Staples SPDR Perks Up (Premium)

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Market/ETF Video – Large-cap Techs Lift S&P 500, Small-caps Weigh on Breadth, Defensive Groups in Downswings (Premium)

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The technical picture shows a split market and the fundamental picture is also split. Large-cap techs are leading and the 5-day SMA crossed above the 200-day SMA for the S&P 500. However, small-caps remain weak and the Composite Breadth Model is at -3. The Fed came to

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Market and ETF Report – Big Swings and Rotations within the Market, Big Tech Leads, Defensives Lag with Downswings (Premium)

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The market went through some serious rotations over the last few months. The Finance sector led the market off the October low and then fell apart over the last four weeks. Healthcare and the defensive groups led the market from early October to

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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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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

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Stocks fell sharply on Tuesday as the market reacted to testimony from Fed Chairman Powell. The Dollar surged and gold fell, but the 20+ Yr Treasury Bond ETF actually advanced on the day. Based on

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The S&P 500 SPDR (SPY) fell back to its 200-day SMA in February and then surged with a sharp advance the last few days. This advance triggered breakouts in several ETFs that were featured in last week’s report and video. Today’s report will update these charts and set the

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