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How to Find the True Market Leaders (Free)

Stocks surged this week with the S&P 500 SPDR (SPY) advancing over 5% and nearing its falling 200-day SMA. The big trend is still down because SPY recorded a 52-week low a month ago and a lower low from June to October. The ETF also remains below its falling 200-day SMA. Following my process at TrendInvestorPro, SPY remains off limits because it is in a downtrend and not showing relative strength. Chartists looking for real strength should focus on ETFs that held above their summer lows in October and are already above their 200-day SMAs. These are the real leaders that warrant our attention.

The chart below shows the Biotech ETF (IBB) with these leading characteristics. Notice how the ETF held well above its summer lows in September, which is when SPY was hitting new lows. IBB then broke out of a falling channel and broke the 200-day SMA in late October. SPY, in contrast, is still below its 200-day SMA. IBB sports a bullish chart and shows upside leadership. The October lows mark support and a close below these lows would argue for a re-evaluation.

The indicator window shows the percentage difference between the close and the 200-day SMA with horizontal lines at +3% and -3% (TIP Indicator Edge Plugin). These lines are used to filter signals and further qualify breaks of the 200-day, which will reduce whipsaws. An upside break is deemed valid when the close is more than 3% above the 200-day. The same applies for a downside break. The long-term uptrend is considered valid until the close is more than 3% below the 200-day.

Despite a bear market environment for most of 2022, TrendInvestorPro continues to focus on ETFs showing upside leadership and strong price charts. ETFs relative to healthcare, energy and defense have these characteristics – and more recently we are seeing strength in metals. Click here for immediate access to our reports, videos and strategy articles.

The Percent Above MA, Trend Composite, ATR Trailing Stop and eight  other indicators are part of the TrendInvestorPro Indicator Edge Plugin for StockCharts ACP. Click here to learn more and take your analysis process to the next level.

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The S&P 500 is in the midst of a modest oversold bounce within a bigger downtrend. The Composite Breadth Model remains bearish, yield spreads are elevated and the overall environment for stocks is bearish. Counter-trend bounces are part of the process and I have yet to see enough strength to suggest that

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Almost everything is bouncing, but not everything is leading. Stocks forged a massive one day reversal on October 13th as SPY opened around 349 and closed near 366 for a 2.6% gain on the day. The move from open to close was +4.8%. Stocks followed through on this reversal day with further

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The S&P 500 SPDR (SPY) is up around 7% the last two weeks and we are starting to see short-term overbought indications. Overbought, keep in mind, is a double-edged sword. Overbought suggests that the advance is getting over extended and the bigger downtrend could take over soon

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The Composite Breadth Model remains bearish, yield spreads are elevated and the overall environment for stocks is bearish. SPY became quite oversold in late September and early October, and then turned choppy in October. The latest October swing is

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It’s a bit of a mess out there, both fundamentally and technically. Technically, we have new lows in Chinese stock indexes after sharp declines on Monday, and the major US and European indexes are in downtrends. The major index ETFs here in the US became oversold in late September

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Stocks are attempting to firm here in October, but any firmness would be a consolidation within a bigger downtrend and any bounce would be considered a counter-trend bounce within a bigger downtrend.

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The Composite Breadth Model remains bearish, yield spreads remain elevated and the overall environment for stocks remains bearish. Price action in the major index ETFs turned choppy and volatile the last few weeks, but this is considered noise within a larger downtrend. September and October

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Today’s report is a motley mix of ETFs. Only two are in actual uptrends (biotech and the Dollar). The Trend Composites for the clean energy ETFs turned negative on Wednesday so these are clearly out of the picture now. While many ETFs broke their summer lows in September and broke their late September lows in October, some held above both of these lows

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Stocks did the old pop and drop with the market surging Monday-Tuesday last week and then falling the next four days. Many ETFs moved to new lows, but some managed to hold above last week’s lows. Several tech and bond related ETFs hit fresh 52-week lows, which

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Stocks got a big bounce the last two days, but this is still considered an oversold bounce within a bigger downtrend. SPY, QQQ and IWM fell sharply the last two weeks of September and were ripe for such a bounce. Overall, the

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