Systematic Trading Strategies and Next Level Trading Setups
SPY and QQQ continue to lead the market with leading breakouts in mid May. Small-caps surged over the last five days, but the S&P SmallCap 600 SPDR (IJR) remains below its falling 200-day SMA. IJR is also showing relative weakness. Despite strength and leadership in large-caps and large-cap techs, many are looking quite
QQQ and tech ETFs are leading the surge off the April low, but there is another group leading year-to-date. Year-to-date performance is important because it includes two big events: the stock market decline from mid February to early April and the steep surge into early June. We need to combine these two events for a complete performance picture.
Despite the stock market surge from early April to early June, only a handful of stock ETFs are outperforming alternative asset ETFs. Commodity and crypto related ETFs account for twelve of the twenty year-to-date leaders in the all-weather ETF list, which has 74 ETFs. The year-to-date percentage change (YTD %Chg) is perfect for measuring performance because is encompasses the stock market
The broader market remains mixed with fewer than 50% of S&P 1500 stocks in long-term uptrends. Strength is concentrated in large-caps and large-cap tech stocks (Nasdaq 100). Several tech ETFs formed flag/pennant patterns the last two weeks and broke out. In an interesting twist, we are also seeing strength in Consumer Staples and Utilities, two defensive groups. Commodities remain strong, especially metals. Silver and Platinum broke out, while Palladium turned up.
There is no change for the broad market environment, which is mixed, at best, and still bearish at worst. The weight of the evidence turns bearish in mid March and this signal has yet to be reversed. Keep in mind that SPY and QQQ are part of the broad market environment, but they are large-cap driven ETFs that do not always reflect conditions under the surface. Breadth indicators reflect conditions for the average stock.
Even though small-caps and mid-caps are dragging their feet, Nasdaq 100 stocks are leading with the highest percentage above their 200-day SMAs. This is a positive sign for large-cap stocks and stocks in the Technology sector. In addition, SPY and QQQ are holding their May 12th breakouts and 200-day SMA. Again, this is positive for large-caps and tech stocks. Small-caps and mid-caps are still
Today’s report covers commodity ETFs and the Bitcoin ETF (IBIT), simply because they are leading in 2025. Year-to-date, nine of the top ten performing ETFs are commodity or crypto related. My focus list has 74 ETFs covering equities, commodities, bonds and crypto. The Aerospace & Defense ETF (ITA) is the only equity ETF in the top ten right now. The table below shows the 20 ETFs with
SPY, QQQ and XLK are leading the surge as their gap-breakouts hold. The broader market, however, remains mixed as small-caps and mid-caps lag. New highs are starting to appear with cybersecurity, defense and telecom leading the way. We are also seeing relative strength in blockchain and software. Precious metals remain strong with platinum joining the breakout parade. Copper perked up and Bitcoin is trading near new highs.
The broad market environment is mixed, at best, and still bearish at worst. Keep in mind that SPY and QQQ are part of the broad market environment, but they are large-cap driven ETFs that do not always reflect conditions under the surface. Breadth indicators reflect conditions for the average stock. Just over 50% of S&P 500 stocks are above their 150 and 200 day SMAs. This
Here we go again. Negative tariff news on Friday weighed on stocks, and positive tariff news lifted stocks on Monday-Tuesday. Last week’s drop and today’s pop do not change the situation in the markets. SPY and QQQ broke out with gap-surges on May 12th. Even though May 12th represents another tariff-related event, these breakouts and gaps are holding, and bullish until proven otherwise. Short-term, stocks were
The bullish signals stacked up in April and May, but most long-term breadth indicators are still bearish. SPY and QQQ showed signs of capitulation in early April and rebounded into mid April. A Zweig Breadth Thrust triggered on April 24th and several other thrust indicators turned bullish in May. We also saw SPY and QQQ break
PGM stands for the platinum group of metals, which includes ruthenium, rhodium, palladium, osmium, iridium and platinum. These metals have similar properties and are usually found together when mining. Palladium is a key metal for catalytic converters, and is also used in electronics and dental alloys. Platinum is mostly used for jewelry, and also for catalytic converters.
Stocks were hit as SPY fell 1.69%, its largest 1-day decline since April 21st, which was just before the Zweig Breadth Thrust. We do not need to look far for the reasons. First, stocks were short-term overbought after the surge from April 22nd to May 20th. SPY was up over 16% in 20 days. Second, the 30-yr Treasury Yield surged above 5% and hit a new high
Stocks started improving with the Zweig Breadth Thrust on April 24th and continued with a bullish 5/200 cross. Despite a strong advance, breadth has yet to expand to levels that signal a bull market. SPY and QQQ are holding their gaps and 200-day SMAs, but short-term overbought after big moves. We will show the key levels to watch. Elsewhere, year-to-date performance highlights the true leaders and metals are perking up.
It seems as if there are conflicting signals in the stock market. The Zweig Breadth Thrust triggered bullish on April 24th and the 5/200 Filter Cross triggered bullish on May 15th, but the long-term trend and breadth indicators remain decidedly bearish. NDX %Above 200-day SMA ($NDXA200R) is the only indicator (of 15) to trigger bullish.
The bullish evidence continues to build, but the long-term breadth indicators have yet to turn net bullish. SPY and QQQ showed signs of capitulation in early April and rebounded into mid April. A Zweig Breadth Thrust triggered on April 24th and several other thrust indicators turned bullish in May. We also saw SPY, QQQ and RSP break their 200-day SMAs. These are bullish indications for large-caps and, perhaps
SPY and QQQ crossed above their 200-day SMAs with big moves on Monday, and held above these long-term moving averages the entire week. The V-Reversal was extraordinary and SPY seems short-term overbought, but this cross above the 200 day SMA cross is a bullish signal for the most important market benchmark. Despite a bullish signal, long-term moving averages are
SPY and QQQ hit their moment of truth in early May – and then powered through their March support breaks with gap-surges on Monday. These were the moves that reversed the long-term downtrends. Even though the long-term breadth indicators have yet to signal a bull market, SPY and QQQ are in uptrends, as our four big sectors. This is clearly positive for stocks, and
Stocks extended after the Zweig Breadth Thrust signals in late April with SPY and QQQ negating their March support breaks. Tech-related ETFs made sharp U-turns with leading moves over the last five weeks. Despite impressive gains, these ETFs are short-term overbought. Elsewhere, gold and silver are consolidating after big gains, IBIT extended on its breakout and ITA hit a new high.
Stocks plunged in historic fashion with long-term breadth indicators reaching extremes in early April. Stocks then surged in historic fashion with a Zweig Breadth Thrust and steep advance. The plunge is like stretching a rubber band and the rebound is the effect of letting go. The further the stretch, the bigger the snap back.
The thrust continued on Monday with SPY surging 3.3% and the percentage of S&P 1500 stocks above their 50-day SMA hitting its highest level since December 2nd. The chart below shows an update for the S&P 1500 Zweig Breadth Thrust strategy. A bullish thrust triggered on April 24th and SPY extended above
Stocks plunged into early April and surged into early May, suggesting that a “V” reversal is in the making. There are two parts to the V reversal. First, there is the V, which is the plunge and the rebound. Second, there is the breakout move that completes the reversal. SPY fulfilled the V part, but
SPY and QQQ are in a short-term uptrend that include a Zweig Breadth Thrust on April 24th. Even though the long-term trends and breadth indicators remain bearish, this short-term uptrend remains in play as long as the wedges rise in SPY and QQQ. As noted in these first charts, I am looking for confirmation from S&P 1500 Percent Above 50-day SMA ($SUPA50R) as the
The weight of the evidence is mixed, at best for the stock market. Our long-term trend and breadth indicators are bearish, but we did get short-term thrust signals towards the end of April. These signals remain in play so we will update the key levels to watch. Despite a record rebound the last few weeks, the March breakdowns remain and the short-term upswings look like counter-trend bounces. Stocks are also short-term overbought. Strategically, the long-term downtrends and bear market are negative. Tactically, upside could be limited as resistance levels come into play and short-term conditions become overbought.