Market/ETF Video – Serious Split in the Market, Defensive Groups Lead, Key Groups Lag, Short-term Flags Fails (Premium)

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Market/ETF Review and Outlook Video

The Composite Breadth Model is net bullish, but the stock market is as split as ever and some key groups are leading the way lower. Large-caps are leading and small-caps are lagging. We are even seeing a serious split within large-caps because less than half of S&P 500 stocks are above their 200-day SMAs. Defensive groups, such as Utilities and Staples, are leading. Key economic groups, such as retail, housing, semis and banks, are lagging and down year-to-date. So even though the market regime is technically bullish, a look under the hood shows a shaky situation. The leading ETFs reflect this shaky situation because none of them are from the Technology or Consumer Discretionary sectors. ETFs related to energy, commodities, aerospace-defense, consumer staples and utilities are at the top of the list for the strongest uptrends. Also note that the short-term flags within downtrends are failing for the high-beta ETFs.

       Broad Market Notes

  • Breadth Model is Bullish, but Market is Split
  • Defensive Issues are Leading (Utes, Dividends, Staples)
  • Lagging Groups are a Concern (Housing, Retail, Semis, Banks)
  • SPY and QQQ Stall in Reversal Zones
  • Small-caps Still Underperforming
  • Failing Flag Breakouts within Bigger Downtrends (IWO, QQQJ)
  • TLT Continues Lower after Oversold Bounce
    Short-term Breakout Fails in Junk Bond ETF
  • GLD and SLV Form Bullish Corrective Patterns
  • UUP Breaks out to Another New High
  • Yield Spreads Narrow Significantly
  • Fed Balance Sheet Stops Expanding

      ETF Trends, Patterns and Setups:

  • Trend Composite Turns Positive for SPY, but it is Not a Leader
  • The Real Leaders have Uptrends and High StochClose (XLU, PBJ, XOP, GDX, XME)
  • Oil Reverses Downswing within Volatile Range (WTI, DBE)
  • Energy ETFs Extend after Flag Breakouts (XLE, XOP, XES, FCG)
  • Agribusiness and Steel ETFs Consolidate after Surge (XME, MOO)
  • Aerospace & Defense ETFs Consolidate after Breakout Surges (ITA, PPA, XAR)
  • Copper Miners ETF Hits New High (COPX plus CPER, DBB)
  • DB Agriculture ETF Holds Short-term Breakout (DBA)
  • Sugar Holds Breakout as Coffee and Wheat Go for Breakouts (CANE, JO, WEAT)
  • Strategic Metals ETF Extends to New High (REMX)
  • Gold and Silver ETFs Correct after Breakout Surges (GLD, SLV)
  • Palladium ETF Hits Potential Reversal Zone (PALL)
  • A Short-term Setup in the Choppy Timber-Forestry ETF (WOOD)
  • Large Wedge Breakouts in Play (REZ, XLB, XLV)
  • Uranium ETF Holds Breakout (URA)
  • Cybersecurity ETF Leads within Tech (CIBR)
  • Shakey Flag Breakouts within Bigger Downtrends (4 Tech ETFs)
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
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