Market/ETF Video – Weakness under the Surface and in Key Groups, Defensive and Commodity ETFs Lead (Premium)

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Market/ETF Review and Outlook Video

The Composite Breadth Model flipped back to bearish as the 5-day SMA for SPX crossed below the 200-day SMA. Despite whipsaws in the model, the percentage of stocks above the 200-day SMA and High-Low Percent paint a picture of weakness in 2022. SPY and RSP may be holding up, but the other major index ETFs and key sectors are not. Utes, Staples, Healthcare and Energy are leading the sectors. We are also seeing continued strength in most commodity-related ETFs. Gold and silver came alive this past week with correction-ending breakouts.  The Aerospace & Defense ETF and Residential REIT ETF are setting up with bull flags, while the Cybersecurity ETF could be weighed down by the tech sector and the Clean Energy ETF could suffer from its connection with small-cap growth.

       Broad Market Notes

  • Composite Breadth Model Flips Bearish
  • Small and Mid Cap Breadth Drags
  • Big Sectors in Downtrends (XLK, XLF, XLY, XLI, XLC)
  • Key Groups in Downtrends (ITB, XRT, KRE)
  • Tech ETFs Start from Lower Low and Fail Below February High
  • SPY: Impulse vs Counter-Trend Moves
  • QQQ Reverses after Counter-trend Bounce
  • IJR Breaks Wedge to Continue Downtrend
  • TLT Plunges to New Lows Again
  • Junk Bonds Follow TLT Lower
  • BBB Spreads Remain Elevated
  • GLD and SLV Break Out of Corrective Patterns
  • UUP Breaks Out and Hits New Highs

      ETF Trends, Patterns and Setups:

  • ETF Trend- Rank Table Review
  • Healthcare SPDR and Providers Hit New Highs (XLV, IHF)
  • Defensive ETFs Tag New Highs (XLU, PBJ, XLP, DVY)
  • DB Energy ETF Forms Bullish Consolidation (DBE)
  • Energy-Related ETFs Hold Strong (XLE, XES, XOP, FCG)
  • Agribusiness and Steel ETFs Form ST Bullish Consolidations (MOO, XME)
  • Residential REIT and Aerospace/Defense ETFs Form Bull Flags (PPA, REZ)
  • Copper Miners and Copper ETFs Pull Back within Choppy Uptrends (COPX, CPER)
  • DB Base Metals ETF Consolidates within Uptrend (DBB)
  • Uranium ETF Holds Strong (URA)
  • Palladium Breaks Out and Falls Back (PALL)
  • DB Agriculture ETF Breaks Out (DBA)
  • Coffee, Sugar and Wheat ETFs Extend On Breakouts (JO, CANE, WEAT)
  • Uptrends, But Wary (XLB, KIE, REMX)
  • Cybersecurity is Still Tech (CIBR)
  • Clean Energy is Still Small-cap High Beta (PBW)
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
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