Recent Posts from Chart Trader and System Trader:
Big Triangle Breakouts in Key Tech ETFs – How to Trade a Pullback (Free)
After leading the market into February 2020, tech-related ETFs were hit with strong selling pressure into March and extended their corrections into May. Large triangles formed in several and they broke out of these bullish continuation patterns
Mind the 10-year Yield Chart, Not the Fed (Free)
Traders interested in Treasury bonds, Treasury bond ETFs and yields would be better off ignoring Fed-speak and focusing on the
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
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.
CARZ Revs its Soon-to-be Silent Engine (Free)
Some of the old Ford and GM cars can still rev their engines, but the sound of a revving engine could go the way of the dodo. Perhaps, I should say that the price chart for the Global Auto ETF (CARZ) is revving its engine and poised for a breakout.
Signals and Expectations for Gold and Silver
(Part 1 with Video – Free)
The Gold SPDR (GLD) crossed above its 200-day EMA in early May and its 200-day SMA this past week. Both signals are “bullish” and point to a long-term uptrend, but tell us little regarding realistic expectations going forward. To get a better understanding, we need
Trading a Short-term Bullish Pattern within a Bigger Bullish Pattern (Free)
The Cybersecurity ETF (CIBR) was hit with the rest of the tech sector over the last few weeks, but it held the March lows and is on my radar as a possible triangle forms over the last few months. In particular, I am watching
Non-confirmations Show Creeping Correction that Could Expand (Free)
The S&P 500 SPDR hit a new high last week, but it was alone at the top because several other major index ETFs did not confirm. In fact, these non-confirmations have been building since March as fewer groups participated. Of note, several tech-related ETFs peaked in
KRE Breakout Holds and Bodes well for Small-caps (Free)
The Regional Bank ETF pattern over the last few months is similar to that of the S&P SmallCap 600 SPDR and Russell 2000 ETF. This is not surprising because the financial services sector accounts for 17.8% of IJR and 16.34% of IWM, and is the second biggest sector for both
Semis Loose their Shine (Free)
The long-term trend for the Semiconductor ETF (SMH) remains up, but the ETF is coming under some selling pressure and underperforming the broader market. While this is not enough reason to turn long-term bearish, it does increase the odds of corrective period in the coming weeks.
Small-caps Keep Everyone Guessing – Here’s Mine (Free)
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
Small-cap Breadth Relative to Large-cap Breadth (Free)
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.
Base Metal ETF Gets the Squeeze (Free)
The DB Base Metals ETF (DBB) is breaking out of a bullish continuation pattern after a Bollinger Band squeeze and this signals a continuation of the long-term uptrend.
Healthcare SPDR Looks Poised to Extend Uptrend (Free)
The Healthcare SPDR (XLV) formed two bullish continuation patterns within its long-term uptrend and recent breakouts bode well for further gains.
A Relative Strength Clue for QQQ (Free)
The Nasdaq 100 ETF (QQQ) represents the largest stocks in the Nasdaq and the Nasdaq 100 Next Gen ETF (QQQJ) covers the next 100 (101 to 200). Stocks at the top of the latter group are knocking on the door and
News Flash! Big Advances Deserve Big Corrections and Proper Perspective – Tesla Example (Free)
Dozens of high flying stocks and ETFs are down double digits from their February highs, but chartists should put these
IBB: Still a Correction within a Bigger Uptrend (Free)
I wrote about the Biotech ETF (IBB) on February 28th as it pulled back from a new high. The pullback was viewed as a correction within the bigger uptrend, but the correction extended further than expected. At the time, I drew a falling wedge on the chart and marked resistance with the red line at 163.
Applying Multiple Timeframe Analysis to the Healthcare SPDR (Free)
As its name suggests, multiple timeframe analysis looks at two or more timeframes to find a setup. Typically, the longer timeframe is used to define the long-term trend and set the trading bias. The shorter timeframe is then used to find setups in harmony
Tech Stocks, the 10-year Yield and Questionable Narratives (Free)
Two items are dominating the news right now: the rise in interest rates and decline in tech stocks. Are rising rates really an issue for tech stocks? The charts suggest that the evidence is mixed, at best. In fact, it is not very hard to find periods when tech stocks rose along with sharp rises in the 10-year Treasury yield.
Secondary Downtrends in Primary Uptrends Create Opportunities (IBB Example) (Free)
With a pullback led by QQQ and the high flyers, several ETFs have become short-term oversold in a longer term uptrend. In Dow Theory terms, the primary trend for these ETFs is up and the secondary trend is down. A secondary downtrend within a primary uptrend is considered a correction within that uptrend and a possible opportunity.
A Medium-term Breadth Indicator Waves the Caution Flag (Free)
The Nasdaq 100 has been on a tear the last few months with a move to new highs, but a medium-term breadth indicator is not keeping pace here in February. This indicator is simply flashing the yellow caution sign right now and we have yet to see an actual signal that would point to a correction. Here’s what to look for.
An Industrials ETF with More Juice than XLI
Not all ETFs are created equal and the name does not always tell the entire story. One would think that the Industrials SPDR (XLI) and the Industrials iShares (IYJ) are similar in make up and performance. This is not the case because one has a clear edge over the other.
Seasonality Looks Weak, but Price Action is Not
The seasonal patterns over the next two months are not very strong, but price action is strong with the S&P 500 hitting a new high. Price action is more important than the seasonal pattern because profits and losses are driven by price changes, not seasonal tendencies. Seasonality becomes a force when it aligns with price action. Let’s investigate.
SOXX Follows Overbought Extreme with Outsized Decline
Last weekend’s post showed the Semiconductor ETF (SOXX) with a 10 day overbought streak and several ETFs with even bigger overbought streaks. These streaks came to an end this week as SOXX fell 6.21%, its biggest weekly decline since mid March. As measured by Normalized ROC, this is an outsized decline that argues for at least a corrective period over the next few weeks.