Old economy ETFs continue to lead. ETFs related to industrials, materials, metals, housing and finance hit new highs. These ETFs were already in uptrends and they were simply extending on their breakouts, which occurred in March or April. Even though they are leading and in strong uptrends, many are getting quite extended and ripe for a rest. This means they are in the trend-monitoring phase.
ETFs related to technology and high growth were hit hard the last six days. The Technology SPDR broke its late April low with a breakaway gap, the Semiconductor ETF failed to hold its early April breakout and the Software ETF formed a lower high, which means a downtrend could be starting. The message here is that high-growth and technology are out of favor.
There are no real setups this week (bullish continuation patterns). There are plenty of oversold conditions out there, but market conditions are not looking very good. The biggest sector in the S&P 500 is lagging and we are entering a seasonally week period (May-June) [1]. ETFs that are oversold right now are lagging and could remain oversold before a bullish continuation pattern takes shape. Now may be a good time to wait for the dust to settle and better setups to emerge.