Market/ETF Video – Stocks are Oversold within Strong Downtrends, Downside Participation is High, Ag, Energy and Dollar are Standouts  (Premium)

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Market/ETF Review and Outlook Video

The major index ETFs and big sector SPDRs extended their downtrends and recorded fresh 52-week lows over the last few days. New lows were also seen in most tech and consumer discretionary ETFs. The Composite Breadth Model reflects the broadness of downside participation and widening yield spreads show stress in the credit markets. In short, the Market Regime for stocks is bearish. We could see an oversold bounce and even a sharp bear market bounce. Nevertheless, bounces from 52-week lows are considered counter-trend moves within bigger downtrends. Energy, Agriculture and the Dollar represent the few remaining uptrends out there.

       Broad Market Notes

  • Composite Breadth Model Remains Bearish
  • %Above 200-day SMA Indicators Reflect Broad Weakness
  • BBB and CCC Spreads Show Stress in Credit Markets
  • Fed Balance Sheet Flatlines
  • Gold Channels Lower and Tests Support Zone
  • Industrial Metals Follow Stocks Lower
  • DB Agriculture ETF Corrects within Uptrend
  • Dollar Rises as Stocks Fall
  • TLT Remains in Downtrend and Near New Lows
  • Junk Bond ETF Forms Pennant after 52wk Low
  • Oil Tests Prior Breakout with 50% Retracement

      ETF Trends, Patterns and Setups:

  • Energy ETFs and XME are the only Stock-Based ETFs in Uptrends
  • Only 7 of the All Weather 50 are in Uptrends (Energy, Ag, Dollar)
  • XLE hits Support, Becomes Oversold and Forms Inside Day (Plus XES, PSCE, FCG)
  • DB Energy ETF Pulls Back after New High (DBE)
  • Wheat ETF Plunges and Becomes Oversold within Uptrend (WEAT)
  • Sugar ETF Tests Support Zone within Uptrend (CANE)
  • Coffee ETF Forms Falling Flag after Wedge Breakout (JO)
  • SPY Gets an Oversold Bounce within a Strong Downtrend
  • IWM and QQQ Bounce from New 52wk Lows
  • Big Six Sectors Hit 52-wk Lows (XLK, XLY, XLC, XLI, XLF, XLV)
  • Key Tech ETFs Forge Lower Lows Yet Again (SKYY, CIBR, IPAY, SOXX, IGV)
  • EW Consumer Discretionary and Housing Forge 52wk Lows (RCD, ITB, XRT)
  • Platinum, Palladium and Copper Sink Along with Stocks (PLTM, PALL, CPER)
  • Clean Energy, Lithium and Biotech Show Relative Chart Strength (ICLN, LIT, XBI)
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
Choose a Strategy, Develop a Plan and Follow a Process

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