Recent Commentary and Analysis
Market/ETF Video – Short-term Uptrends Reverse, High-beta and Tech ETFs Lag, Defensive ETFs Take the Lead (Premium)
The Composite Breadth Model is bullish, but there are some serious pockets of weakness within the market. Namely, small-caps, high-beta ETFs and tech-related ETFs. Selling pressure increased on Tuesday and many ETFs broke their early April lows to reverse their upswings
Market and ETF Report – Small-caps Lagging, Watching Short-term Supports, Defensive Groups Leading (Premium)
The weight of the evidence is largely bullish for stocks, but it is clearly a tale of two markets. Large-caps and high-quality stocks are holding up better than small-caps and high-beta stocks. We are also seeing money move into defensive groups with leadership coming from healthcare,
Stocks vs ETFs – Drawdowns in ETF Strategies are Changing the Dynamic because Risk is not Properly Rewarded (Premium)
ETFs give traders a chance to trade baskets of stocks and spread the risk. This sounds like a positive, but ETF strategies suffered disproportionately in 2022 and 2023 is starting out the same. We should be rewarded for risk and the reward should
Market/ETF Video – Large-caps Lead, High-Beta and Small-caps Lag, Key Supports to Watch going Forward (Premium)
The Composite Breadth Model is bullish, but the market is quite split and I am focused on the swings of late. In particular, the upswing since mid March. Large-caps and high-quality
Market and ETF Report – Large-cap Leading, Small-caps Attempt Breakout, Palladium ETF Catches a Bid (Premium)
The weight of the evidence remains bullish for stocks. Large-caps are leading with the S&P 500 SPDR nearing its early February high. Small-caps are still lagging because the Russell 2000 ETF remains well below this high. Despite relative
Overbought until it Turns – Using the McClellan Oscillator for Condition and the PPO for Timing (Free)
Overbought and oversold conditions are tricky because stocks can become overbought/oversold and remain overbought/oversold as the move continues. This is why traders need another indicator
Market and ETF Report – McClellan Oscillator becomes Overbought, Waning Participation, Key Supports to Watch (Premium)
Today’s report starts with analysis using the McClellan Oscillator. We will look at three different periods to see how the signals work in different market environments. Most recently, this indicator became overbought two weeks ago.
Market/ETF Video – Weight of the Evidence is Bullish, Market Remains Split, Defensive Groups Extend on Breakouts (Premium)
The Composite Breadth Model is bullish at +5, but there are splits when looking at the percentage of stocks above the 200-day SMA for the different indexes and yield spreads. Small-caps are underperforming and the CCC spread shows stress at the low end of the bond market.
Market and ETF Report – SPY is Overbought, Watching High-beta ETFs, Defensive ETFs Extend on Breakouts (Premium)
Stocks surged from mid March to early April and this created short-term overbought conditions for SPY, XLK and QQQ. Large-cap tech and high-quality stocks led the rally. Small-caps and high-beta stocks lagged the market during this advance, but
Waning Participation within a Key Benchmark Could Spell Trouble (Free)
Breadth is holding up for Nasdaq 100 stocks, but deteriorating for S&P 500 stocks and I view this as a warning sign for the stock market. Breadth indicators measure the degree of participation. For example, the percentage of S&P 500 stocks
ETF Liquidity Considerations – Volume, Dollar-Volume, Liquidity of Holdings, Bid-Ask Spread and Liquidity Grades (Premium)
There are two things to consider for ETF liquidity. First, there is the actual trading volume for the ETF. Second, there is the trading volume for the holdings in the ETF. Hat-tip to Joe H. for enlightening me on this aspect. An ETF with relatively low trading volume can
Market/ETF Video – A Fragile +5 in the CBM, Performance Differentials are Concerning, Breakouts in two Defensive ETFs (Premium)
The Composite Breadth Model is bullish and at +5, but I would characterize this as a fragile +5. Today’s video will dive into the five inputs that make up the model and show why the +5 looks fragile. SPY and QQQ are in uptrends and continue to lead, but the equal-weight S&P 500 and IWM are in downtrends
Market and ETF Report – Techs Lead the Charge Again, Small-caps Still Lagging, Healthcare-Related ETFs Get Breakouts (Premium)
It remains a tale of two markets. Large-caps and large-cap techs are leading, while small-caps are lagging. The chart below shows QQQ exceeding its early March high in mid March and SPY exceeding this high last week. IWM remains some 7% below this high. The performance differentials since March 1st are also large. QQQ is up 9%, SPY
Trend Composite Impulse Signals versus In-State Signals with Momentum (Premium)
Impulse signals offer the chance to catch a trend as soon as it starts, but in-state signals give traders the opportunity to add momentum to their strategy. Today’s article compares a strategy using impulse signals for the Trend Composite against one that uses in-state signals. The latter
Market/ETF Video – Tape vs Fed, Precious Metals Lead, Tech Holds Strong, Industrial Metals Go for Breakouts (Premium)
The stock market is mixed, very mixed. The tape is bearish because the Composite Breadth Model is negative, but large-caps are holding up because the 5-day SMA for the S&P 500 is above the 200-day SMA. Yield spreads remain elevated and show stress