A Winner is Emerging in the Battle for the Trend s (Free)

The stock market is as divided as ever with the pockets of weakness at the risk-on end. Risk-off ETFs and commodity-related ETFs are performing the best right now. Finance-related ETFs are also holding their own as the 10-yr Treasury Yield exceeds 2%. There are some

February is the month of the big bounce. As is normal after a big decline, names that led the way lower and fell the most are getting the biggest bounces. Most of the ETFs with the biggest bounces were in downtrends already and these are still considered oversold bounces within downtrends.

Small-caps were the talk of the town in mid November as they broke out of a seven month range and the skies opened up. Volatility then reared its ugly head in late November when the Russell 2000 ETF (IWM) fell some 12 percent from a new high. IWM continued lower in January and hit a 52-week low. The Russell 2000 Growth ETF (IWO) led the way as money fled high-beta stocks and ETFs.

There were lots of downtrend signals this past week and over the past month. Selling pressure expanded and broadening participation on the downside was enough to push the Composite Breadth Model back into bear market mode. Note that I will update the Market Regime page on Friday morning. For now, the pickings are slim among the equity-related ETFs

Stocks continued their recent ways with small-caps (IWM) and high-beta tech stocks (QQQJ) leading the way lower in January. IWM is down around 8% year-to-date and QQQJ is down around 11%. The year is starting just how it ended: growth and high beta remain out

Last Tuesday, I wrote about the transition phase currently underway in the markets. Actually, there are a number of transitions underway and perhaps they are linked. While I do not like to dive deep into the fundamentals, the macro backdrop for 2022 is looking very different from 2020 to 2021.

The transition process is difficult and the markets are undergoing a transition from a covid-driven economy to a normal economy. A covid economy implies Fed easing, fiscal stimulus and falling Treasury yields. A normal economy means no more balance sheet expansion, no more fiscal stimulus and a normalization of Treasury yields.

Stocks were rattled on Wednesday with Technology, Communication Services and Consumer Discretionary leading the way lower. As noted on Tuesday, the magnificent seven dominate these three sectors. Selling pressure was not limited to tech as REITs, Biotechs, Airlines and

QQQ and the Technology SPDR are holding up and near new highs, but there are still some serious pockets of underperformance within the tech sector and even within the top stocks. Today’s commentary will look at QQQ breadth, the big seven and QQQ’s little brother, QQQJ. We will analyze charts

Stocks started the new year with gains, but there were still some pockets of weakness. The Nasdaq 100 Next Gen ETF (QQQJ) fell as money shied away from high beta tech, weakness in transports weighed on the Industrials SPDR and the Materials SPDR fell over 1%. The Russell 2000 ETF gained

The Composite Breadth Model flipped back to bullish with the bounce in stocks over the last five days. Even so, the market remains quite divided right now. Large-caps are still leading, small-caps are still lagging and mid-caps remain caught in the middle. The divide is visible within some sectors as well.