Recent Commentary and Analysis
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Exit Strategies – Trend Reversal, Chandelier, Parabolic SAR and ATR Trailing Stop – Resources
Chartists trading oversold bounces and short-term bullish continuation patterns have two basic choices when it comes to an exit: trailing stop or trend reversal. Trailing stops are used initially as stop-losses and then trail price if/when it moves higher. Trend reversal exits are used to accumulate during an uptrend and exit when the longer-term trend reverses. This article will cover the trend reversal exit and three trailing stop alternatives.
Highlights from the ETF Ranking, Trends and Setups Table
This is an update covering some recent setups on the ETF Ranking, Trends and Setups table. There were no new trend signals over the last two weeks. Only 6 of the 118 ETFs are in downtrends, which are based on StochClose signals. 52 ETFs scored 98 or higher on the 52wk Range score, which means they are at or close to 52-week highs. Even though
The Methodology behind the ETF Trends, Patterns and Setups Report
This article will explain the methodology behind the ETF Trends, Patterns and Setups report, which is published every Thursday. This comprehensive report groups ETFs according to trend strength, the current pattern at work or the setup in play. ETFs with the steadiest uptrends and recent new highs will be featured near the top. These are followed by ETFs with uptrends and bullish patterns
ETF Trends, Patterns and Setups – Reopening ETFs Resume the Lead, Healthcare Stays Strong, GLD Breaks Out
Stocks are on the march again with the re-open trade leading the way here in 2021. The year ended with small-caps, retail, banks and energy leading the last two months of the year and this theme picked up again this week. A new year and a new month translates into money ready to go to work and this money found its way into the momentum leaders of the last three months.
Ranking Performance, Tracking Trend Signals and Finding Mean-Reversion Opportunities
The ETF Ranking, Signals and Setups Table makes it easy to separate the leaders from the laggards, track trend signals and find mean-reversion candidates. This article will explain the key features of this customizable table and show how to get the most out of it. We will finish with a chart example showing the origins for signals and numbers on the table.
Defining the Market Regime and Improving Returns with Diversification and StochClose (Premium)
The broad market timing model took another evolutionary step. The goal is to develop a logical and robust model that captured major moves in the stock market, and will continue to capture these moves. We are not talking pullbacks, corrections or dead cat bounces. Instead, we are talking bull and bear markets that affect the vast majority of stocks. The BIG trend or the market regime, as it also called.
ETF Trends, Patterns and Setups – Bull Market, Recent Breakouts, Current Consolidations, Inflationary Pressures
The bull market in stocks remains intact as we start 2021. The S&P 500 SPDR and Nasdaq 100 ETF finished the year at new closing highs, while the Russell 2000 ETF finished less than 2% from its December 23rd closing high, which was a 52-week high. For the year, IWM was up 18.34%, QQQ rose 47.57% and SPY gained 16.16% (sans dividends). Note the Silver ETF kept pace with QQQ in 2020.
ETF Trends, Patterns and Setups – Tech ETFs End 2020 with the Lead – Lots of Consolidations within Uptrends
We have an interesting mix of overbought ETFs and ETFs that are consolidating. ETFs that are overbought are not outright bearish, but they do not have tradable setups. The overbought ETFs are the current leaders because they are the ones with the biggest gains and the ones trading at 52-week highs. ETFs that are consolidating within uptrends have tradable setups, such as bullish flags, pennants
Timing Models – Bulls in Control, but Short-term Participation Narrows
The broad market environment remains bullish, but the picture is turning mixed as fewer stocks follow the major indexes higher. The S&P 500 SPDR, Nasdaq 100 ETF and Russell 2000 ETF moved to new highs this week and are positive the last 16 trading days, but the S&P 500 Equal-weight ETF did not hit a new high this week is down around 1% the last 16 days. The equal-weight S&P 500 represents performance for the “average” stock in the S&P 500. I am also seeing some underlying weakness in short-term breadth for the S&P 500 and the technology sector.
ETF Trends, Patterns and Setups – Techs Extend and Lead, Banks and Energy Stall, Gold Hits Resistance
The bulls remain in the driver’s seat when it comes to stocks. Strength within the stock market is broad with the S&P 500, Nasdaq 100 and Russell 2000 recording new highs here in December. There is also broad strength within the stock-related ETFs with dozens of new highs. Tech-related ETFs reasserted themselves as the true leaders with breakouts in late November and new highs throughout December. Keep in mind that these ETFs also recorded new highs
Finding Next Generation Growth Stocks (QQQJ) and Understanding the Momentum Effect
There is a new ETF in town that promises big potential. The Invesco Next Generation Nasdaq 100 ETF (QQQJ) is based on an index with the same name. As the Invesco web site explains, 90% of its total assets will come from the underlying index and this index is based on the 101st to 200th largest stocks in the Nasdaq. This makes it a small and mid cap version of the Nasdaq 100. The ETF is
Weekend Video and Chartbook – Post Breakout Moves, Strong Participation, Tech Retakes the Lead, Short-term Consolidation Breakouts
Today’s video starts with the long-term picture for the big three: SPY, QQQ and IWM. All three are holding their breakouts with IWM extending the furthest and QQQ perking up this past week. We continue to see strong participation in the breadth indicators. Yield spreads remain at normal levels with the junk spreads narrowing even more in December. We will then turn to the new ETF ranking table to show how it can be sorted and viewed. Attention then turns to the ETF ChartBook. The Home Construction ETF (ITB) finally
Timing Models – Breakouts Hold, Breadth Reflects Broad Participation, Fed Balance Sheet Pops
As with many things in life, we are usually better off focusing on the present when it comes to stock market analysis. Focus on what IS happening, as opposed to what MIGHT happen. This is a game of odds and the odds favor a continuation of current conditions, as opposed to a change. The trend, especially an uptrend, is more likely to continue than reverse. There will be plenty of things concerns along the way, but trend is the single most important factor and the trends are clearly up for the major index ETFs.
ETF Trends, Patterns and Setups – Tech ETFs Lead, Signs of Strength and Froth, lntermarket Dynamics
The technology-related ETFs are coming back to life with the Technology SPDR (XLK) and Nasdaq 100 ETF (QQQ) moving to new highs this week. These two are just playing a little catchup because several other tech-related ETFs already hit new highs in late November (SOXX, IGV, SKYY, HACK, FDN, IPAY, FINX). Energy and banks are attracting a lot of attention still, but these tech-related ETFs are the ones trading at new highs.
Squeezing Apple for a Breakout as QQQ and SPY Hit New Highs
Several big tech stocks have consolidation patterns working the last few months and Bollinger Band squeezes in December. These include Apple, Amazon, Microsoft and Nvidia. Today’s article will focus on the strongest of the four, and the one with a breakout working already.