Recent Commentary and Analysis
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Weekend Video – Large-caps Lead, Bearish Continuation Pattern in IEF, Asian ETFs with Breakouts (Premium)
Stocks finished on a high note with SPY and QQQ hitting new highs. Mid-caps, small-caps and micro-caps are still short of new highs and lagging large-caps overall. Treasury yields look poised to move higher, which means bonds look poised to move lower. Gold is very oversold, but still has a rather
Short and Long Term Yields Diverge, Junk Bonds Break Out, Water Holds Strong, MJ Tries to Bottom, Emerging Markets ETF Goes for Breakout (Premium)
Today’s commentary starts with Treasury yields by highlighting the divergence between short-term and long-term yields. We then look at the yield curve and its correlation with the Regional Bank ETF. Even though KRE has underperformed the last three months, it became quite oversold last week and got a bounce. We then turn to the breakout in the
ETF Trends, Patterns and Setups – SPY Grinds, Techs Lead, Banks and Small-caps Drag, Clean Energy Perks Up (Premium)
The S&P 500 SPDR remains in a steady uptrend with a grind higher, but we are seeing less strength as we move down in market cap. The S&P 500 EW ETF has been flat since May, while small-caps and mid-caps have been flat since March. SPY is caught up in rotations within the market that generally favor
A Dozen Books that Influenced my Analysis Process, Understanding of Markets and Trading Mindset (Free)
While there are too many influences to list in one post, this commentary features a dozen books that helped me over the years. These books cover technical analysis, trend-momentum strategies, insights from great traders and the mindset required to stay in the game.
Introduction to Trend-Following (revised) – Assumptions, Expectations, Indicators, Backtests and Conclusions – with video (Premium)
This article will dive into trend following. We will start by going over some key assumptions and expectations to consider when implementing a trend-following strategy. What are realistic Win Rates and Profit/Loss ratios? Attention then turns to selecting a timeframe suitable to trend-following. I will then explain 10 trend-following indicators
Downside Participation Expands – Here’s How to Measure and the Key Levels to Watch (Free)
SPY experienced its biggest weekly decline (-2.2%) since late February and the nine-week Rate-of-Change turned negative for the first time since late October. The ETF also closed below its 10-day SMA for the first time since late January. Normally, a close or dip below the 10-week
Weekend Video – Small-caps Fail to Hold Breakout, SPY Takes a Hit, QQQ holds Up, TLT Surges, Gold Breaks Down (Premium)
It was quite an eventful week with the 10-yr yield falling sharply, the 5-yr yield surging, gold reversing its upswing and stocks taking a hard hit the last three days. Tech and Healthcare are holding up relatively well as Industrials, Finance, Materials and Consumer Staples led the decline
SPY Grinds Higher, Short-term Breadth Wanes, QQQ Turns Up, IWM Holds Breakout (Premium)
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ETF Trends, Patterns and Setups – Short-term Breakouts Failing, Tech-ETFs Get Extended, Housing Leads Lower (Premium)
Among the ETFs, there are still several holding above their breakouts and near new highs (Energy, 5G, Autos, Defense). These are still the leaders. We are, however, seeing a lot of short-term breakouts fail (Industrials, Materials, Metals, Agriculture). In addition, a few key groups are seriously underperforming
Dollar Surges, Gold and Treasuries Buckle, 10-yr Yield Goes for Breakout, QQQJ Hits Resistance (Premium)
There is nothing like a Fed meeting to shake up the market. Thus, I am going to cover the intermarket ETFs a day early because there are some reversals and patterns we should be aware of. There appears to be a change in thinking at the Fed and the Fed is still the elephant in the room when it comes to
Weekend Video – Techs Follow Bonds Higher, Old Economy ETFs Sag, Gold and Silver Consolidate (Premium)
Tech stocks led the market again this week and the tech-related ETFs are the top performers over the last four to five weeks. The old economy ETFs, such as industrials, housing,
Market Remains Mixed, Oil Extends on Breakout, GLD and SLV Up Upswings, Bonds Surge (Premium)
The stock market does not get any more mixed than it did on Thursday. The S&P 500 SPDR closed with a .50% gain, the S&P SmallCap 600 SPDR closed with a 1.6% loss and the Nasdaq 100 ETF advanced 1%. This was not a value-growth split, but rather a large-small split. Small-cap growth (IJT) and small-cap value (IJS) were both down over 1%.
ETF Trends, Patterns and Setups – Failing Pennants and Flags, REITs Get Extended, XLU and XLV Set Up (Premium)
There are still plenty of short-term setups out there. These include one to three week pennants, flags and falling wedges. There were even some short-term breakout attempts in late May and early June. Several of these breakouts are under pressure as prices fell back. A short-term consolidation within an uptrend is typically a bullish continuation pattern, but
5G Takes the Lead (Free)
The 5G Next Generation ETF (FIVG) is taking the lead within the tech space as it breaks out of a bullish continuation pattern. FIVG is leading because it recorded a new high here in early June. Not very many tech-related ETFs hit new highs here in early June and this makes it relatively easy to separate the leaders from the laggards.
Seesaw Market, Techs Align with Treasuries, Consolidation Breakouts in FIVG, ITA and UFO (Premium)
Tech stocks were hit with selling pressure on Thursday and then rebounded along with Treasury bonds on Friday. The narrative seems to be that rising bonds and falling yields are bullish for tech stocks. Regardless of the narrative, several tech related ETFs are holding their breakouts within larger