Systematic Strategies and Next Level Technical Analysis

ETF Trend/Pattern Ranking and Grouping – Strong Extensions, Second Winds, Modest Extensions, Corrective Patterns, Laggards and Breakdowns

Use CRTL+P to Print
Annotated ChartBook
StochClose Ranking
ChartList at StockCharts

Stock-related ETFs remained strong and many so-called overbought ETFs became even more overbought as their uptrends extended. Many ETFs are in the trend-monitoring or waiting phase. The early breakouts occurred in July and these ETFs followed through with further gains the last several weeks. Some tech-related ETFs stalled in late July and early August, but caught a second wind with breakouts over the last few weeks.

ETFs in the middle groups (7 and 8) hit new highs a few weeks ago and then corrected with either consolidation patterns (GLD, GDX) or pullbacks (IBB, XBI). The bond-related ETFs are also in this group. It seems that these defensive/alternative ETFs were in favor before the stock market moved into second or third gear. Even though they are lagging short-term, the pullbacks are deemed corrections within the bigger uptrend.

The bottom groups (11, 12, and 13) are lagging and we are seeing some fresh breakdowns in the energy-related ETFs. Some finance-related ETFs are also showing signs of weakness as their bounces retraced around half of the prior decline and they broke wedge/channel lines recently. The bond-proxies (XLU, XLRE, IYR) are still going nowhere and lagging.  

I would encourage you to check out the annotated chartbook, which is linked above. The charts are grouped according to their trend/pattern characteristics. In addition, the commentary is on the charts for easy access and there are plenty of annotations.

The charts below are linked to an equivalent StockCharts chart.

ETF Scatter Plot and Ranking Table

The scatter plot highlights three groups: the correcters, the leaders and the laggards.  There is a big cluster in the upper right (green outline) and these are the leaders. They have high StochClose values (>90) and high RSI values (>65). The red outline shows the laggards in the lower left. They have relatively low StochClose values, which means they are lagging and/or in downtrends. They also have relatively low RSI values, which means they fell the last one to two weeks. The blue zone highlights the “interesting” ETFs, which are the so-called “correcters”. These are ETFs that are in uptrends and have relatively low RSI values. This means we are seeing a pullback within an uptrend.

See this article to learn more about the StochClose indicator.

The next image shows the ETF ranking table and a resurgence in the tech-related ETFs. After falling back the last few weeks, the Software ETF (IGV), Internet ETF (FDN) and Cloud Computing ETF (SKYY) surged in the rankings with big moves. Overall, we are seeing strength in Technology (QQQ, XLK, FINX, XLC, SOXX), Consumer Discretionary (XLY, ITB, XHB, XRT) and select Healthcare (XLV, IHI).

1) Early July Breakout, Strong Advance, 52-week Highs:

XLY, ITB, XHB, XRT, TAN

2) Early July Breakout, Steady Advance, 52-week Highs

SOXX, HACK, FINX, BOTZ, XLB

3) Early August Breakout, New 52-week High

QQQ, XLK, XLC, FDN

4) Mid-Late August Breakout, New 52-week High

MTUM, IGV, SKYY

5) Early-Mid July Breakout, First 52-week High

SPY, XLP, IPAY

6) Consolidation Breakout, Near 52-week High

XLV, IHI

7) Increasing Volatility, Consolidation, Near 52-week High

GDX, GLD, SLV

8) Pullback after 52-week High, RSI Mildly Oversold

XBI, IBB, REMX, AGG, TLT, LQD

9) Mid July Breakout, Above June High, No 52-week High

IWM, USMV, XLI, XME, VIG, PFF, HYG, IEMG, EFA

10) Mid July Breakout, Did not Hold above June High

MDY, IJR, IHF, RSP

11) Consolidation Since June, below 200-day

XLE, KBE, KRE, REM, AMLP

12) Mid July Breakout, Below June High, Below 200-day

XLF, KRE, KBE, KIE, REM, XAR

13) Flag/Channel Breakdown, below falling 200-day

XLE, FCG, XES, XOP, AMLP, MJ

Thanks for tuning in and have a great day!

Timing Models – SPY Tags a New High, Medium-term Indicators Favor the Bulls and SPX Breadth Model Remains Bullish

By

The bulk of the evidence remains bullish for large-caps, large-cap techs and mid-caps, but mixed for small-caps. I am also seeing mixed performance within the S&P 500, especially when looking at the equal-weight sectors. Technology, Healthcare and Consumer Discretionary remain strong, while Finance, Energy and REITs are weak. Finance is the only big sector that shows underlying weakness though.

Timing Models – SPY Tags a New High, Medium-term Indicators Favor the Bulls and SPX Breadth Model Remains Bullish Read More »

ETF Trend/Pattern Video – Bonds Oversold, Gold Turns Volatile, XLY Holds Chandelier, REITs Vulnerable and Dollar Springs Bear Trap

By

Today’s video will focus on the core ETF charts. We will start with the scatter plot and see that the bond ETFs in the upper left, which means they are oversold and in uptrends. On the ranking tables, ETFs related to Consumer Discretionary, Healthcare and Technology are leading. I continue to follow the Chandelier Exits for several ETFs as their uptrends extend (XLY, ITB, XRT). Elsewhere

ETF Trend/Pattern Video – Bonds Oversold, Gold Turns Volatile, XLY Holds Chandelier, REITs Vulnerable and Dollar Springs Bear Trap Read More »

ETF Ranking, Grouping and Analysis – Mean-Reversion Setups in Bond ETFs, Bounces in Biotech ETFs and Breakouts in Two Healthcare ETFs

By

Despite the usual pockets of weakness, there is still plenty of strength out there in ETF land. Housing, Retail and Consumer Discretionary ETFs moved to new highs. Tech-related ETFs remain mixed with some hitting new highs and some moving back into their consolidation patterns. Precious metals ETFs got sizable mean-reversion bounces, but it looks like volatility is picking up in this group.

ETF Ranking, Grouping and Analysis – Mean-Reversion Setups in Bond ETFs, Bounces in Biotech ETFs and Breakouts in Two Healthcare ETFs Read More »

Q&A – How to Use the ETF Rankings, RSI65 versus StochClose, Settings for Chandelier Exits and Trend-Timing the Broader Market

By

I received some pertinent questions over the weekend and create a post to share the answers. My email answers were not as detailed as in this post, which provides more details and examples. The first question deals with the StochClose ranking and how to use it. This answer will also highlight seven broad trading strategy groups. Second

Q&A – How to Use the ETF Rankings, RSI65 versus StochClose, Settings for Chandelier Exits and Trend-Timing the Broader Market Read More »

Timing Models – Participation Broadens as Two Key Sectors Perk Up and Mid-cap Breadth Improves

By

Even though the current advance is getting quite extended, the broad market environment remains bullish and the medium-term uptrends rule. Tech-related ETFs and stocks drove the market higher from late March to late June. Even though the tech surge slowed, participation broadened over the last six weeks as other groups picked up the slack. The Industrials SPDR (XLI) is the top performing sector since July 1st

Timing Models – Participation Broadens as Two Key Sectors Perk Up and Mid-cap Breadth Improves Read More »

ETF Ranking and Grouping – Uptrends, Overbought Conditions, Pullbacks and Breakout Failures

By

There are still a lot of uptrends out there in ETF land, and this includes some key stock-related ETFs. Nevertheless, we are seeing some rotation at work the last few weeks. The tech-related ETFs slowed their advance and some even failed to hold their breakouts. Meanwhile, ETFs related to consumer discretionary continued higher and are leading the pack. However, some of these new leaders are getting extended (XLY, XHB).

ETF Ranking and Grouping – Uptrends, Overbought Conditions, Pullbacks and Breakout Failures Read More »

Four Stocks Poised to Drive Healthcare Higher

By

The Healthcare SPDR (XLV) is one of the strongest sectors in 2020. Even though it does not sport the biggest gain, XLV recorded a new high in July and some 80% of its components are above their 200-day EMAs. The new high points to a long-term uptrend and upside leadership, while the percentage of stocks above the 200-day EMA points to broad strength within the sector. Sector SPDRs, however, are only as strong as the sum of their parts (component stocks).

Four Stocks Poised to Drive Healthcare Higher Read More »

Timing Models – Falling Volatility Powers SPY and Breakouts Hold, but Participation Continues to Wane

By

The chart below shows year-to-date performance for the top 20 stocks in the S&P 500. Overall, the year is mixed with eleven up and nine down. Amazon is up over 70%, Apple is up over 50% and Microsoft is up over 30%. Facebook and Home Depot are dragging their feet with gains greater than 20%. As strong as the stock market seems, strength is clearly concentrated in a few stocks. Moreover, these few stocks are up big, really big.

Timing Models – Falling Volatility Powers SPY and Breakouts Hold, but Participation Continues to Wane Read More »

ETF Ranking and Grouping – Breakouts Hold, Small-caps Come to Life, Banks and Energy Still Lagging

By

After some volatility and big moves in March, April and May, trading has turned downright boring the last few weeks. Nevertheless, the majority of breakouts are holding and there are plenty of leaders. Tech, housing, retail, precious metals and Healthcare continue to lead. ETFs related to Finance and Energy continue to lag. Industrials and small-caps perked up this week and extended on their breakouts, which were looking rather feeble just last week.

ETF Ranking and Grouping – Breakouts Hold, Small-caps Come to Life, Banks and Energy Still Lagging Read More »

Timing Models – Participation Wanes, but Medium-term Uptrends and Short-term Breakouts Hold

By

There are times for setups and signals, and there are times to wait. The waiting game is either waiting for the next setup/signal to materialize or monitoring the current signal in play. At this stage, we are in the monitoring stage for several signals that triggered in the first half of July.

Timing Models – Participation Wanes, but Medium-term Uptrends and Short-term Breakouts Hold Read More »

Timing Models – Medium-term Uptrends, Short-term Breakouts and QQQ Exuberance

By

My current focus remains on the medium-term up trends, which began with the surge in late March. The bulls are still in control of these medium-term trends and we saw several short-term breakouts in July. Some breakouts were strong as price exceeded the June high (SPY), while some were feeble as price remains well below the June high (RSP). Strong or feeble, the breakouts are still holding and have yet to be proven otherwise.

Timing Models – Medium-term Uptrends, Short-term Breakouts and QQQ Exuberance Read More »

A Bollinger Band Breakout or the Dreaded Head Fake?

By

There were a number of Bollinger Band squeeze plays over the last two weeks and also a number of breakouts. These breakouts are bullish until proven otherwise, but chartists should also be aware of the head fake. In his book, Bollinger on Bollinger Bands, here’s how John Bollinger puts it: Traders beware! There is a trick to The Squeeze, an odd turning of the wheel that you need to be aware of, the head fake.

A Bollinger Band Breakout or the Dreaded Head Fake? Read More »

ETF Ranking and Grouping – A Short-term Shift to the Laggards and Bollinger Band Breakouts

By

The leading ETFs took a breather over the past week and the laggards picked up the slack. The Nasdaq 100 ETF and Technology SPDR are down slightly, while the Regional Bank ETF and Metals & Mining SPDR are up sharply. Even though the rotation into the lagging groups may seem healthy, keep in mind that the Technology sector is still the biggest driving force in the S&P 500.

ETF Ranking and Grouping – A Short-term Shift to the Laggards and Bollinger Band Breakouts Read More »

ETF Charts and Setups – Timeframes and Market Caps Collide as Short-term Support Levels Emerge

By

The mixed market is reflected on the ETF charts with tech-related ETFs hitting new highs and underperforming ETFs testing support levels. Will the leaders pull the laggards up or will the laggards drag the leaders down? Or, do we just need to analyze each chart on its own merits? Probably the latter. Several ETFs are at a moment of truth as their medium-term breakdowns collide with short-term support and reversal zones.

ETF Charts and Setups – Timeframes and Market Caps Collide as Short-term Support Levels Emerge Read More »

Scroll to Top