Market/ETF Review and Outlook Video
The Composite Breadth Model remains negative, but the market is quite split overall. The 5-day SMA for the S&P 500 is very close to crossing above the 200-day SMA, the percentage of stocks above the 200-day SMA is strong and yield spreads are narrowing. There was also a move towards high-beta ETFs in January, as well as a move away from low volatility ETFs. January is clearly risk-on so far and the market is at a moment of truth. One more push higher would turn the Composite Breadth Model positive, move the 5-day SMA above the 200-day and trigger a big wedge breakout in SPY. The Market Regime page highlights these key charts.
Broad Market Notes
- Composite Breadth Model is Negative
- %Above 200-day SMA Indicators are Strong
- Junk and BBB Spreads Reflect Growing Confidence
- A 12 month Falling Wedge for SPY
- SPY Becomes short-term Overbought (%Above 20-day)
- QQQ Bounces within Downtrend
- IWM Outperforms and Challenges Nov-Dec High
- TLT Forms Higher Low, but Still in Downtrend
- 10-yr Treasury Yield Corrects after New High
- Dollar Accelerates Lower as Gold Accelerates Higher
- US Oil Fund Challenges Resistance
ETF Trends, Patterns and Setups
- New Uptrend Signals over the last Five Days
- Low Volatility ETFs Lagging in January: SPLV, XLV, XLP, PBJ, XLU
- High Beta ETFs Leading in January: ACES, DRIV, SOXX, ESPO, YOLO
- EW Consumer Discretionary ETF Goes for Breakout (RCD)
- ETFs with Leading Uptrends: ITB, KIE, PPA, PHO, XME
- Low Volatility ETFs Pullback after Surging (XLV, XLP, XLU, PBJ)
- Energy ETFs with Breakouts Working (XLE, XES, AMLP)
- Energy ETFs with Deeper Corrections (XOP, FCG)
- Biotech ETFs Break Out (IBB, XBI)
- Internet, Payments and Semis Challenge Resistance (FDN, IPAY, SOXX)
- Momentum ETF with Bullish Pullback/Retracement (MTUM)
- Networking ETF Turns Up within Consolidation (IGN)
- Technology SPDR Forms Higher Low with Breakout (XLK)
- Digital Health, Cyber Security and Software with Higher Lows (CIBR, IGV, EDOC)
- Self-Driving EV Tech ETF Forms Possible Double Bottom (IDRV)
- Palladium ETF Firms within Downtrend (PALL)
Thanks for tuning in and have a great day!