Systematic Strategies and Next Level Technical Analysis

ETF Trends, Patterns and Setups – Finance, Industrials and Energy Hold up as Tech, Healthcare and High-Flyers Correct (Premium)

Annotated ETF ChartBook
Trend and Setup Table

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%.

Furthermore, 75 of the 119 ETFs in the Core List are in uptrends and were “oversold” at some point over the last five days. This means RSI was in the 30-50 zone. 65 of these are currently oversold with RSI finishing in the 30-50 zone on Wednesday. This shows broad participation in the current correction, which is being led by ETFs related to tech, biotech and clean energy.

The image below shows a section from the ETF Ranking table sorted by two columns (Up&OS and RSI). Hold the CTRL key, click the Up&OS column heading, keep holding the CTRL key and click on the RSI heading. This sorts oversold ETFs by their RSI values. With RSI values between 30 and 40, these ETFs are quite oversold. ETFs in this section include: clou, icln, ibb, arkg, arkk, hack, cibr, xbi, ewz, igv, ipo, pbw, botz, tan, qcln

The next to the last column on the right shows the 52-week range. 100 equals a 52-week high and 0 equals a 52-week low. All of these ETFs recorded 52-week highs in January or February and all are down double digits from these highs.

Keep in mind that these ETFs were up HUGE from late March to December. At the end of December, the 190 day Rate-of-Change ranged from +46% for IBB to +330% for TAN and +317% for PBW. ARKG and ARKK were up more than 200%. These are big moves in ETFs with above average volatility. The corrections do not look that big on the one year charts, but they are big when viewed over the last two months.  

The next table section shows the ETF sorted by the StochClose values. A few month ago, the ETFs in the table above were at the top of this list. Now we are seeing ETFs associated with energy, finance and industrials at the top. These are the current leaders in the market. Notice that the MLP ETF (AMLP) came to life and closed at a 52-week closing high, as did the Steel ETF (SLX).

Flag Breakout in early February and New High

XLE, XES, XOP, FCG, XME

Flag/Pennant Breakout early February, New High, RSI>80

DBE, DBB, DBA

You can learn more about ATR Trailing stops in this post,
which includes a video and charting option for everyone.

Flag Breakout in early February and New High

XLF, KRE

Consolidation Breakout in mid February and New High

XLI

You can learn more about ATR Trailing stops in this post,
which includes a video and charting option for everyone.

Flag Breakout in early Feb, Modest Follow Through

XLB, AMLP

Zigzag Uptrend since November, Did not Become Oversold

RSP, MDY, IJR

Zigzag Uptrend with Mild Pullback/Consolidation

SPY, IWM, XLC

Short-term Pullback within bigger Uptrend

XLK, SOXX, FDN, IPAY, FINX, ITB, XRT, MJ, IHI

Deeper Pullback within Bigger Uptrend, Broke late January low

QQQ, XLY, IGV, SKYY, IBB, XBI, HYG

Sharp Pullback within Bigger Uptrend, Down Year-to-date

PBW, TAN, HACK

Uptrend, but Slow Pullback since mid-late January

XLV, IHF, PHO

Uptrend, Stalling since mid December Breakout

SLV

Wedge Breakout in mid January, Lagging Uptrend

REZ

ETFs from here are lagging over the last few months or in downtrends. Note the gold and Treasury bonds are the weakest of all right now.

Back in long-term Consolidation, but StochClose Bullish: XLRE

Lagging, StochClose Bearish, Below 200-day: XLP, XLU

Selling Climax, Ripe for a Bounce: TLT, TIP

Downtrend: AGG, LQD, GLD, GDX

Thanks for tuning in and have a great day!

Secondary Downtrends in Primary Uptrends Create Opportunities (IBB Example) (Free)

By

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 »

Timing Models – QQQ Reverses Short-term Uptrend, 3 Big Sectors Weigh, Medium-term Participation Wanes within SPX (Premium)

By

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

Timing Models – QQQ Reverses Short-term Uptrend, 3 Big Sectors Weigh, Medium-term Participation Wanes within SPX (Premium) Read More »

ETF Trends, Patterns and Setups – Cyclical ETFs Lead, Tech ETFs Pullback, High-Flyers Correct Hard (Premium)

By

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).

ETF Trends, Patterns and Setups – Cyclical ETFs Lead, Tech ETFs Pullback, High-Flyers Correct Hard (Premium) Read More »

Timing Models – Commodities Lead in 2021, SPY Extends Uptrend, Extended Conditions Extend, Fed Balance Sheet Pops (Premium)

By

Stocks and commodities are leading in 2021 (risk on). Small-caps took a breather this week, but the Russell 2000 ETF (IWM) is still the second best performer among 14 intermarket ETFs. The DB Energy ETF (DBE) is the top performer with an 18.9% gain and the DB Base Metals ETF (DBB) gets third place with a 7.5% gain. QQQ is holding its own with a 6% gain and the

Timing Models – Commodities Lead in 2021, SPY Extends Uptrend, Extended Conditions Extend, Fed Balance Sheet Pops (Premium) Read More »

ETF Trends, Patterns and Setups – Big Gains Since November, Big Months for Finance and Energy, A Few Corrections Underway

By

Making money in the stock market has been pretty easy since November. And not just stocks. Oil, base metals, agriculture and silver are also up. Gold, the Dollar and bonds are down as money moved out of stock-alternatives and into riskier assets. As shown below, dozens of ETFs are up more than 40% since early November and many are up more than 20%.

ETF Trends, Patterns and Setups – Big Gains Since November, Big Months for Finance and Energy, A Few Corrections Underway Read More »

Timing Models – Stall after Surge, Short-term Breadth Indications, Sector Breadth Signals

By

The major index ETFs are in clear uptrends with the big three hitting new highs again this week (SPY, QQQ, IWM). We also saw 52-week highs in three of the eleven sector SPDRs (XLK, XLC and XLY). These three were leading throughout 2020 and they continue to lead in 2021. XLI, XLV and XLF are close to 52-week highs so I will not read too much into this short-term non-confirmation. In any case, XLK, XLC and XLY account for well over 50% of the S&P 500

Timing Models – Stall after Surge, Short-term Breadth Indications, Sector Breadth Signals Read More »

ETF Trends, Patterns and Setups – Oversold Bounces Materialize, Trend Monitoring Phase Kicks In

By

There were dozens of ETFs with short-term oversold conditions and short-term corrective patterns working at the end of January. With a bounce the last two weeks, we now have a slew of ETFs hitting new highs again and 27 ETFs in the Core list (119) with double digit gains here in February. Momentum is just the gift that keeps on giving. The performance since November is extraordinary. Here are some metrics since November 1st (69 days)

ETF Trends, Patterns and Setups – Oversold Bounces Materialize, Trend Monitoring Phase Kicks In Read More »

Timing Models – Red Herrings, Big Oversold Bounces, New Highs, RSI Streak Ended and IWM Remains Extended

By

Stocks shrugged off a sharp decline the last week of January and rebounded the first week of February with a strong surge. This surge extends the bigger uptrends as SPY, QQQ and IWM recorded new highs. The Technology SPDR (XLK) and Communication Services SPDR (XLC) led the sector SPDRs with new highs. The Consumer Discretionary SPDR (XLY) came close to a new high on Thursday and could hit one with further strength on Friday. The Energy SPDR (XLE) led with the biggest

Timing Models – Red Herrings, Big Oversold Bounces, New Highs, RSI Streak Ended and IWM Remains Extended Read More »

ETF Trends, Patterns and Setups – Oversold Bounces Materialize, Techs Lead, Energy-Related ETFs Break Out, REITs Perk Up

By

Dozens of ETFs became short-term oversold last week and most of these bounced this week. A combination of bullish seasonal patterns (turn of the month), short-term oversold conditions and longer-term uptrends paved the way for this bounce. Despite these bounces, stocks in general still seem ripe for a corrective period and February is historically one of the weaker months.

ETF Trends, Patterns and Setups – Oversold Bounces Materialize, Techs Lead, Energy-Related ETFs Break Out, REITs Perk Up Read More »

Turn of the Month Strategy – Strong Long-term Performance, Beats Buy-Hold, Some Weak Months

By

The turn of the month shows a strong bullish bias with an extremely stable equity curve that really took off the last few years. This strategy, which is only invested 38% of the time, outperformed buy and hold with a higher Compound Annual Return. Overall, the eight day percentage change at the turn of the month is positive 68% of the time for SPY. Despite strong numbers overall, February is weakest month when testing over the last twenty years, and we just happen to be in February.

Turn of the Month Strategy – Strong Long-term Performance, Beats Buy-Hold, Some Weak Months Read More »

SOXX Follows Overbought Extreme with Outsized Decline

By

Last weekend’s post showed the Semiconductor ETF (SOXX) with a 10 day overbought streak and several ETFs with even bigger overbought streaks. These streaks came to an end this week as SOXX fell 6.21%, its biggest weekly decline since mid March. As measured by Normalized ROC, this is an outsized decline that argues for at least a corrective period over the next few weeks.

SOXX Follows Overbought Extreme with Outsized Decline Read More »

Timing Models – Weight of the Evidence, SPY Breaks RSI Streak, ROC Shocks and Bearish Breadth Signals

By

The weight of the evidence for stocks remains bullish because the big trends are up, the breadth models are bullish and yield spreads are narrow. Stocks are up considerably since late October and we started seeing signs of excess in January. This week we started seeing signs that some uptrends are under threat. There were outsized declines in some key ETFs, the RSI above 50 streak ended for SPY and there were three bearish

Timing Models – Weight of the Evidence, SPY Breaks RSI Streak, ROC Shocks and Bearish Breadth Signals Read More »

ETF Trends, Patterns and Setups – Outsized Declines, Year-to-date Laggards, Correction Consequences

By

With some pretty sizable declines the last five days, a number of ETFs are now in the red for the year. 99 of the 118 ETFs in the Core list are down over the last five days and 38 are down year-to-date. This shows some pretty broad selling pressure. The biggest losers year-to-date include: Gold Miners ETF (GDX), Mobile Payments ETF (IPAY), Aerospace & Defense ETF (ITA), Airlines (JETS), Industrials SPDR (XLI) and Metals & Mining SPDR (XME).

ETF Trends, Patterns and Setups – Outsized Declines, Year-to-date Laggards, Correction Consequences Read More »

Bull Markets, Gold, Silver and Narratives

By

While intermarket narratives make for interesting debate over a beer, we cannot possibly know all the factors driving asset prices and their weighted influence. Well, at least I cannot. How to we factor in Fed policy, interest rates, interest rate differentials, inflationary pressures, inflation differentials, fiscal stimulus, debt, trade flows, current accounts, economic growth, internal politics and geopolitics. You get the picture.

Bull Markets, Gold, Silver and Narratives Read More »

SOXX and other ETFs with Extended Overbought Conditions

By

The Semiconductor ETF (SOXX) and several other ETFs are on a serious roll in 2021. For the fourth time since 2009, 14-day RSI was above 70 for ten or more days. This is an exceptional streak, but SOXX is not alone and there are even longer streaks. The following list shows some ETFs and the number of days RSI has been above 70: ROBO (39), DRIV (25), ARKQ (13), EWT (13), MOO (12), XRT (11), SOXX (10), YOLO (10). Note that these numbers are based on Thursday’s close.

SOXX and other ETFs with Extended Overbought Conditions Read More »

Timing Models – Broad Strength Remains, Breakouts Extend, QQQ Returns, Yield Spreads Narrow Further

By

Just when you thought it could not get any better, we are seeing fresh new highs in SPY, a resurgence in QQQ, new lows in the yield spreads and a new high in the Fed balance sheet. Over 90% of stocks in the S&P MidCap 400 and S&P SmallCap 600 are above their 200-day SMAs and 150-day SMAs, while over 85% of stocks in the S&P 500 are above these moving averages. Breadth and price action are strong so what could go wrong?

Timing Models – Broad Strength Remains, Breakouts Extend, QQQ Returns, Yield Spreads Narrow Further Read More »

ETF Trends, Patterns and Setups – New Highs Galore, Techs Still Leading, Bond-Proxies Pop

By

Stocks as a whole remain overextended and strong. The big three (SPY, QQQ, IWM) are setting the tone for the overall market as they remain with tight rising channels and steady short-term uptrends. Some ETFs look quite ripe for a pullback (SOXX, PBW, TAN), but there are also ETFs that sport fairly fresh breakouts (XLI, KIE, XLU and REZ). In fact, we are seeing some money move bond-proxies with the breakouts in XLU and REZ

ETF Trends, Patterns and Setups – New Highs Galore, Techs Still Leading, Bond-Proxies Pop Read More »

Scroll to Top