Recent Commentary and Analysis

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Weekend Video – Medium-term Uptrends Battle Waning Participation, Seasonal Patterns and Excesses

Today’s video starts with the medium-term uptrend and key indicators for the S&P 500 because they hold the key as we move into August. The bulk of the evidence remains bullish, but fewer stocks participated in the July advance and the market took a more defensive tone. The breakouts in IWM and XLI were not inspiring, XLF continues to lag and XLU was the top performing sector in July. I will also review the excesses in QQQ, the seasonal patterns, the breadth models, the ChartBook, the Fed balance sheet and yield spreads.

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Weekend Video – SPX Model Turns, QQQ Gets Frothy and IWM Holds BB Breakout

QQQ and tech stocks took a breather this week, but the Consumer Discretionary sector, Housing and Retail picked up the slack. SPY and IWM were down fractionally, while QQQ fell around 1.5% on the week. Today’s video starts with a new signal in the S&P 500 breadth model. Despite this signal, the medium-term uptrend remains the main focus and we will cover the key indicators.

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

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.

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ETF Ranking and Grouping – Breakouts Hold as Participation Broadens

After a dip in June, stocks and ETFs bounced back in July with several breakouts occurring over the last few weeks. In addition, groups that were lagging from April to June are leading over the last two weeks. It is positive to see some of these laggards play catch up and it is also positive to see the advance broadening.

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Weekend Video – Mixed Market, BB Breakouts, Seasonal Patterns and ChartBook

Today’s video starts with the long-term trends, which reflect strength in large-caps, and the breadth models, which show a mixed market overall. I will review the medium-term uptrend and indicators because these hold the key right now. We will then turn to the Bollinger Band and consolidation breakouts working in SPY and RSP. What would it take to proven them otherwise? Seasonality gets interesting in August and September so we will cover these patterns for stocks, small-caps, gold and bonds.

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A Bollinger Band Breakout
or the Dreaded Head Fake?

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.

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

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.

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Candles to Ignore and Bollinger Band Contractions to Watch

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.

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

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.

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Weekend Videos – Breadth Model Review, ChartBook and Seasonality

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.

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Timing Models – A Three Legged Bull

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

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ETF Ranking and Grouping – Lots of Consolidations Appear and Bond ETFs Remain Strong

There is a lot of stalling going on out there. A stall can be the pause that refreshes or it can signal a stalemate that leads to a trend reversal. Several ETFs broke their mid June lows, but the tech and healthcare related ETFs are holding up and have yet to break their mid June lows. Some tech-related ETFs are even trading well above these lows. Outside of tech

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StochClose Strategy (Part 5) – Adding a Profit Target and Testing Sensitivity

This is the fifth and final part in a series on using StochClose in trading strategies. Today we will add a profit target to the trend-following signals. How does a Profit Target and the Profit Target amount affect performance? First, there will be an all-signals tests using the Master 200 ETF list and the All Weather 50 ETF list. Then, there will be portfolio tests using signals

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