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The technology sector is weighing on the S&P 500 as SPY corrects in June. Other sectors, however, are picking up the slack with industrials and healthcare moving higher. This June rotation is also benefitting the Regional Bank ETF and Biotech SPDR, which hit new highs. Today’s report will cover the recent rotations and show how the trade the trend in these two ETFs. $XLI $XLV $XLU $XLF $KRE $XBI $KBE $IBB $ITA
The Dollar is ripping higher with a 4+ percent gain since early May. Rising short-term rates are propping up the Dollar, which is weighing on commodities. Gold and copper fell sharpy the last three weeks. Gold was already in a downtrend, but copper remains in a long-term uptrend. The Copper and Base Metals ETFs are also nearing Bullish Setup Zones. Elsewhere, the Copper Miners ETF broke the May lows, the 7-10Yr TBond ETF broke out to a 25-day high, the DB Agriculture ETF has breakout working. $USD $GLD $CPER $DBB $IEF $DBA
Today’s report focuses on three stocks in the Aerospace & Defense ETF, which has a breakout working since late May. This group corrected in March-April, found its footing in May and moved higher in June. Defense stocks are also part of the Industrials SPDR and account for 24.4% of the sector. BWX Tech reversed off of a support zone, General Dynamics turned up within a consolidation and RTX recaptured its 200-day. SMA $BWXT $GD $RTX
Even though SPY is near a new high, breadth is not as strong as it was at the beginning of the year. Nevertheless, the cup is clearly half full right now because over 60% of S&P 500, Nasdaq 100 and S&P 1500 stocks are above their 200-day SMAs. It takes a move below 40% to trigger a bear market signal. Elsewhere, yield spreads remain
The weight of the evidence remains bullish for stocks, but several tech groups are showing relative weakness here in June. Semiconductors are still strong with new highs again on Monday. However, SMH and SOXX are very extended and ripe for a rest. Tech is the biggest sector in the S&P 500 and semis are the biggest industry group within tech. The market is very dependent on one group right now. $SPY $QQQ $IJH $IJR $XLK $AIQ $DTCR $SMH $SOXX $XLI $XLF $XLU $XLV $KRE $KBE $IAI $ITA $IFRA $XBI $IBB
The Mag7 ETF is slightly lagging the broader market because of relative weakness in three components. Nevertheless, four components are showing strength and the ETF hit a moment of truth as it returned to the breakout zone. Today’s report will focus on performance for stocks in the Mag7, the Mag7 ETF chart and one of the leading components (Apple). $MAGS $AAPL
Nvidia, Alphabet and Amazon are leading within the Mag7. After big moves from late March to May, these stocks corrected into June and hit Bullish Setup Zones. This report/video explains the Bullish Setup Zone, outline the set ups and shows the levels to watch for the follow through breakouts. $NVDA $GOOGL $AMZN
Bonds, precious metals and uranium are trending lower, while industrial metals and agriculture are trending higher. As a consequence, long and short term rates are trending higher, with the latter weighing on gold. Gold, silver and precious metals are in downtrends. Coppers and Base Metals are holding up relatively well with short-term setups working. The Copper Miners ETF remains with a triangle breakout and the DB Agriculture ETF surged off a key retracement. $IEF $UST10Y $GLD $SLV $UST2Y $CPER $DBB $COPX $SRUUF $DBA
Weakness in medical devices/equipment weighed on the healthcare sector this year, but we are seeing strength in large pharma stocks, which account for most of the sector’s weighting. Overall, breadth is improving as XLV extends on its breakouts. We are also seeing bullish setups/breakouts in Pfizer, Vertex, Novartis and J&J $XLV $PFE $NVS $VRTX $JNJ
The utilities sector got a bullish breadth thrust as the percentage of XLU stocks above their 50-day EMA surged above 80. Today’s report will analyze the XLU price chart, this thrust and two long-term breadth indicators, which are bullish. We then dive into the sector with bullish charts for Ameren and Centerpoint. $XLU $AEE $CNP
The weight of the evidence has been bullish since the early April surge. Despite disruptions in the Middle East, high oil prices and rising interest rates, stocks stayed bullish throughout April-May and remain bullish here in June. Clearly, the stock market is looking past current events, as it always does. $XLK $SMH $SOXX $AIQ $DCTR $XLI $ITA $XLB $IFRA $IBB $XBI
SPY pulled back in early June, but remains in bull market mode with improving breadth. The bull market is broadening with more stocks moving above their 200-day SMAs. This is especially true for small-caps, which were leading in March and continue to lead in June. Within the S&P 500, I am seeing a bullish setup in the Industrials SPDR. $SPY $IJR $SPXA200R $SMLA200R $XLK !GT200XLI
Precious metals were hit hard this week with gold, silver and platinum breaking their 200-day SMAs. All three are now in downtrends. Today’s report will cover these breakdowns and show why the macro backdrop is negative for precious metals. The 2-yr Treasury Yield is rising and above the Fed Funds Target Rate, which points to a hawkish Fed. We will chart the macro shifts since 2021 and lay out the bear case for gold, and possibly stocks. $GLD $SLV $$FEDTGT $UST2Y $GDX $COPX $URA $SRUUF
Today’s report will focus on the Mag7 ETF and Semiconductors ($MAGS, $SOXX, $SMH). Hyperscalers drive AI spending and semiconductors are the main beneficiary. MAGS shows relative weakness and the semiconductor ETFs are extremely stretched. Keep in mind that semiconductors account for 48% of the Technology SPDR and tech accounts for 37.26% of SPY.
There are signs of money is moving into groups related to the finance and healthcare sectors. The Finance SPDR, Broker-Dealer ETF and Bank ETFs are breaking out with strong moves the last five days. Within healthcare, the biotech ETFs are setting up with bullish consolidation patterns. Even the lowly Medical Devices ETF is perking up with a double bottom and an bullish Aroon cross. $XLF, $IAI, $KRE, $KBE, $ITA, $IHI, $XBI, $IBB