Market/ETF Video – Bear Market Bounce, Key Groups Leading Lower, Weak Dollar Spurs Rally in Metals (Premium)

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Market/ETF Review and Outlook Video

The Market Regime for stocks remains bearish with the Composite Breadth Model at -5, yields spreads at elevated levels and the Fed balance sheet contracting. Stocks bounced off their October lows, but this bounce is deemed a counter-trend bounce within a bigger downtrend and there are signs that this bounce is reversing. There are some isolated uptrends within the stock market as well as some leading groups (healthcare, energy, defense). These groups, however, are not always immune to broader market swings or the sway of the bear market. In short, risk remains above average for stocks. The Dollar continues to correct within a bigger uptrend and this spurred a surge in industrial and precious metals.  

Broad Market Notes

  • Composite Breadth Model Remains Bearish
  • %Above 20-day SMA Becomes Overbought
  • Fed Balance Sheet Contracts Further
  • CCC and BBB Spreads Remain Elevated
  • Retail, Housing and Tech Lead Lower
  • SPY Breaks and Bounces as QQQ Lags
  • TLT Remains in Strong Downtrend (10yr > 4%)
  • Dollar Bullish ETF Corrects within Uptrend
  • Gold Surges and Challenges October High (plus GDX)

ETF Trends, Patterns and Setups

  • Defense, Energy and Biotechs Leading
  • Random Uptrends (DIA, MTUM, XLI, IGN, PLTM)
  • US Oil Fund Breaks One Wedge and Forms Another (USO, DBE)
  • Energy ETFs Lead with Extensions after Breakouts (XLE, XOP, FCG)
  • Networking ETF Pulls Back after Surge  (IGN)
  • Large Cap Biotechs Lead Small and Mid Caps (IBB, XBI)
  • Relative Uptrends, Short-term Upswings, Long-term Ranges (XLV, IHF, PPA, KIE)
  • Utilities SPDR Consolidates after Surge (XLU)
  • Water Resources ETF Holds Breakout (PHO)
  • Semis Lead Tech since early October, but… (SOXX)
  • Home Construction ETF Forms Bearish Triangle (ITB, KRE)
  • Copper and Copper Miners ETFs Break Out (COPX)
  • DB Base Metals ETF Joins Breakout Parade (DBB)
  • Lithium Battery Tech ETF Reverses Downswing (LIT)
  • Palladium ETF Triggers StochRSI Pop (PALL)
  • Platinum ETF Breaks 200-day as Silver Surges (PLTM, SLV)
    Wheat Weighs on DB Agriculture ETF (WEAT, DBA)
  • Corn, Soybeans and Livestock Hold Up (CORN, SOYB, COW)
Thanks for tuning in and have a great day!

-Arthur Hill, CMT
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