Recent Commentary and Analysis
It has been a wild ride for the Russell 2000 Growth ETF (IWO) and Nasdaq 100 Next Gen ETF (QQQJ) over the last two weeks as they went from emerging leaders to overreaction laggards and back to leading. The lagging part occurred last Tuesday when stocks fell sharply during the day. This whipsaw action is looking more like short-term noise because these two are leading again with strong recoveries.
The S&P SmallCap 600 SPDR (IJR) and Russell 2000 ETF (IWM) are lagging the market, but they are still in uptrends and the noose is tightening. Today we will look at the volatility contraction in IJR and the loss of trend in IWM
Weekend Video – Noose Tightens for Small-caps, Growth Perks Up, Mid-week Head Fakes, Metals and China (Premium)
After getting derailed with a curve ball on Tuesday, the bulls rebounded stocks ended the week on a high note. Again, a wide array of ETFs recorded fresh 52-week highs and there are plenty of strong groups in the stock market. This week we are seeing a possible return to growth, clean energy and China
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Small-cap breadth is seriously lagging large-cap breadth, but we have yet to see a bearish breadth thrust or a breakdown in the S&P SmallCap 600 SPDR (IJR), which is currently consolidating. This commentary will look at the breadth thrust signals and compare the percentage of stocks above the 50-day SMA for the S&P 500 and the S&P SmallCap 600.
Timing Models – Defensive Sectors Surge, SPY and QQQ Remain Extended, Bonds Bounce, New High for Fed Balance Sheet (Premium)
The bulk of the evidence remains bullish for stocks, but some yellow flags are starting to appear. Yellow flags argue for some caution and are not outright bearish. For example, defensive sectors are leading, but the offensive sectors are still holding up, even though they are lagging. Small-caps are
ETF Trends, Patterns and Setups – Defensives Lead, Small-caps Chop, Silver Breakout and MJ Setup (Premium)
The market turned mixed the last six to eight weeks with defensive and high-yielding ETFs leading. ETFs related to Healthcare, Utilities and REITs hit new highs this week and produced market leading moves since early March. Growth oriented ETFs
The Composite Breadth Model remains bullish and this means we are still in a bull market environment. Nevertheless, the odds for a correction are building and we are now seeing a dramatic move away from small-caps, which is reflected in some key breadth metrics. I will show a new twist on
I am always interested in themes that can drive secular trends. These include electronic payments, electric vehicles, clean energy, marijuana and such. These themes involve narratives and I am always careful with narratives. We all love a good story and stories help sell us
Weekend Video – SPY and QQQ Lead, IWM Cup Half Full, Metals Break Out, Emerging Markets ETFs Turns (Premium)
SPY hit yet another new high, nine sector SPDRs hit new highs and the breadth indicators show broad strength within this large-cap benchmark. QQQ also hit a new high as large-cap techs extended their rebound. Small-caps and small-cap growth remain the laggards, but their cups are still half full
Timing Models – Large-caps Extend Lead, Small-Caps Lag, Utes and REITs Lead, IWO hits Moment of truth (Premium)
Large-caps and large-cap techs ripped higher the last five-six weeks with SPY and QQQ hitting new highs. The Technology SPDR and Consumer Discretionary SPDR are leading the charge among the sectors with 13+ percent gains. Keep in mind that Amazon accounts for 23.5% of XLY and Tesla accounts for 14.45%. These two are not exactly pure plays in the
ETF Trends, Patterns and Setups – Metals and Ag ETFs Break Out, High-Flyers Languish, RSI Bullish Failure Swings (Premium)
There is plenty of strength within the stock market and also a few pockets of weakness, or lackluster performance. SPY and QQQ hit new highs this week. This shows broad strength within the S&P 500 and large-cap tech stocks. There were new highs in ETFs related to finance, tech, industrials, materials, healthcare, housing, steel, REITs, semiconductors
The Healthcare SPDR (XLV) formed two bullish continuation patterns within its long-term uptrend and recent breakouts bode well for further gains.
Weekend Video – QQQ Joins SPY with New High, Yield Spreads Narrow, Oil Hits Resistance and ETF Charts (Premium)
Equity-related ETFs continued strong this week with large-cap techs leading the way here in April. SPY also hit a new high, but small-caps are lagging as IWM stalls. Bank and energy related ETFs are also dragging their feet a little. Relative weakness is not a concern because IWM, KRE and XES