ETF Trends, Patterns and Setups – Finance, Industrials and Energy Hold up as Tech, Healthcare and High-Flyers Correct (Premium)

Even though ETFs related to small-caps, mid-caps, industrials, finance and energy are performing well and not part of the correction process, a big portion of the core ETF list are in some sort of pullback or correction over the last few weeks. 48 of the 119 ETFs in the core list are down over the last 22 trading days (since January 29th) and 22 are down more than 5%.

Furthermore, 75 of the 119 ETFs in the Core List are in uptrends and were “oversold” at some point over the last five days. This means RSI was in the 30-50 zone. 65 of these are currently oversold with RSI finishing in the 30-50 zone on Wednesday. This shows broad participation in the current correction, which is being led by ETFs related to tech, biotech and clean energy.

The image below shows a section from the ETF Ranking table sorted by two columns (Up&OS and RSI). Hold the CTRL key, click the Up&OS column heading, keep holding the CTRL key and click on the RSI heading. This sorts oversold ETFs by their RSI values. With RSI values between 30 and 40, these ETFs are quite oversold. ETFs in this section include: clou, icln, ibb, arkg, arkk, hack, cibr, xbi, ewz, igv, ipo, pbw, botz, tan, qcln

The next to the last column on the right shows the 52-week range. 100 equals a 52-week high and 0 equals a 52-week low. All of these ETFs recorded 52-week highs in January or February and all are down double digits from these highs.

Keep in mind that these ETFs were up HUGE from late March to December. At the end of December, the 190 day Rate-of-Change ranged from +46% for IBB to +330% for TAN and +317% for PBW. ARKG and ARKK were up more than 200%. These are big moves in ETFs with above average volatility. The corrections do not look that big on the one year charts, but they are big when viewed over the last two months.  

The next table section shows the ETF sorted by the StochClose values. A few month ago, the ETFs in the table above were at the top of this list. Now we are seeing ETFs associated with energy, finance and industrials at the top. These are the current leaders in the market. Notice that the MLP ETF (AMLP) came to life and closed at a 52-week closing high, as did the Steel ETF (SLX).

Flag Breakout in early February and New High

XLE, XES, XOP, FCG, XME

Flag/Pennant Breakout early February, New High, RSI>80

DBE, DBB, DBA

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Flag Breakout in early February and New High

XLF, KRE

Consolidation Breakout in mid February and New High

XLI

You can learn more about ATR Trailing stops in this post,
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Flag Breakout in early Feb, Modest Follow Through

XLB, AMLP

Zigzag Uptrend since November, Did not Become Oversold

RSP, MDY, IJR

Zigzag Uptrend with Mild Pullback/Consolidation

SPY, IWM, XLC

Short-term Pullback within bigger Uptrend

XLK, SOXX, FDN, IPAY, FINX, ITB, XRT, MJ, IHI

Deeper Pullback within Bigger Uptrend, Broke late January low

QQQ, XLY, IGV, SKYY, IBB, XBI, HYG

Sharp Pullback within Bigger Uptrend, Down Year-to-date

PBW, TAN, HACK

Uptrend, but Slow Pullback since mid-late January

XLV, IHF, PHO

Uptrend, Stalling since mid December Breakout

SLV

Wedge Breakout in mid January, Lagging Uptrend

REZ

ETFs from here are lagging over the last few months or in downtrends. Note the gold and Treasury bonds are the weakest of all right now.

Back in long-term Consolidation, but StochClose Bullish: XLRE

Lagging, StochClose Bearish, Below 200-day: XLP, XLU

Selling Climax, Ripe for a Bounce: TLT, TIP

Downtrend: AGG, LQD, GLD, GDX

Thanks for tuning in and have a great day!

-Arthur Hill, CMT
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