A Bollinger Band Breakout or the Dreaded Head Fake?

The stock market remains mixed, which means it is a stock picker’s market. As the broad breadth measures suggest, this is not a bull market that lifts all boats and makes everyone look smart. This is a relatively narrow bull market with tech, healthcare and communication services leading the way.

The cup remains half full for the S&P 500 SPDR, but half empty for the S&P 500 EW ETF. This could change as RSI firms in a potential reversal zone with a Bollinger Band contraction. Bearish candlesticks are not slowing down QQQ and even IWM could be ripe for a breakout.

The stock market remains mixed overall with pockets of serious strength and pockets of weakness. The Technology and Healthcare sectors continue to lead, while the Finance and Energy sectors lag. QQQ hit a new high and is leading SPY, while large-caps are leading small and mid caps.

The weekend video starts by reviewing year-to-date performance for the major index ETFs, some key groups, the sector SPDRs and the equal-weight sectors. It is mixed, at best. We then turn to the breadth models. The Nasdaq 100 is the only one of the four breadth models that is bullish. Two of the three medium-term indicators are bullish as SPY consolidates above the 200-day and support. I will then update the Fed balance sheet, the yield spreads, the ETF ranking tables and the ChartBook.

The mighty Nasdaq 100 and related technology groups continue to lead the market. In fact, one could even suggest that they are holding up the broader market, with some help from the Communication Services and Healthcare sectors. Together, these groups account for a big chunk of the S&P 500. Despite a big pocket of strength

Today’s video starts with the four long-term breadth models, of which three are in bear mode. We then turn to the three dynamics at work in the stock market: the broad market environment, the medium-term trend and the short-term condition. I will review the weight of the evidence with the equal-weight sectors and intermediate-term indicators. And finally, we will finish with the Fed, yield spreads, the ETF rankings and the ChartBook.

The rock and the hard place is back. The major index ETFs are in medium-term uptrends that started in late March and have yet to reverse. These uptrends, however, are hitting resistance as the 200-day SMAs come into play for SPY and IWM. QQQ left its 200-day in the dust a long time ago.

Some ominous chart patterns are taking shape in the Nasdaq 100 ETF, S&P 500 SPDR and S&P 500 EW ETF. QQQ remains in a clear uptrend with a new high this week. SPY did not exceed its early June high this week and is lagging QQQ. RSP is lagging SPY because it is back below its 200-day SMA with a bearish wedge taking shape.

The weekend video starts with long-term and short-term breadth models for four major indexes: Nasdaq 100, S&P 500, S&P MidCap 400 and S&P SmallCap 600. Only one of the four long-term breadth models is bullish – and no prizes for guessing which one. This week’s bounce established uniform support levels in dozens of ETFs to watch next week. There are ominous wedges in

Today we will dive into long-term and short-term breadth models using the same indicators for four different indexes. These models cover the Nasdaq 100, S&P 500, S&P MidCap 400 and S&P SmallCap 600. Looking at a market of 1500 stocks, the evidence is mixed, at best. Three of the four long-term models are net bearish and all four short-term models are net bullish.

This is just a short update for SPY and a decision on the preferred moving average combo for the S&P 500. After a plunge on Thursday, stocks firmed on Friday and forged an intraday reversal on Monday. This firmness is occurring near short-term support for many ETFs and the major index ETFs held their intermediate uptrends, which have been in place since late March. Small-caps, housing, biotech, gold miners and corporate bonds led the advance.

Today’s weekend video starts with the indicators that make up the breadth model and their individual signals. We then add some basic market timing and show the model signals over the last 20 years. I will also provide a preview of a short-term breadth model. Attention then turns to potential reversals in SPY and TLT, the rising wedges in RSP and IWM, the StochClose rankings and the ChartBook

Stocks took it on the chin Thursday with the biggest weekly decline since declines began (March). Once again, small-caps and mid-caps led the way lower with outsized declines. Even more disconcerting, we saw outsized declines in some key large-cap sectors as the Consumer Discretionary SPDR fell over 5%, the Industrials SPDR fell over 8% and the Finance SPDR fell 7%.