Market/ETF Video – Bears are Back, Bonds Follow Stocks, Defensive ETFs Get Hit, Gold Battles 200-day (Premium)

Market/ETF Review and Outlook Video

The Composite Breadth Model turned negative on Monday and the Market Regime is back to bearish. 2022 was year of the whipsaw for the CBM, but whipsaw periods are normal for trend following models and part of the overall process. AAA spreads widened and the Fed balance sheet contracted further. SPY broke down last week, which means the short-term trend aligned with the long-term downtrend. As a result, all sectors and most defensive ETFs succumbed to selling pressure in December. Elsewhere, gold is holding up as the Dollar remains weak. Oil formed a long falling wedge, energy-stocks firmed after becoming oversold and soybeans led the grains.

Christmas - New Year Break

I will take a break between Christmas and New Year, and there will not be any reports next week (December 26th to 30th). This is the time to put the market aside and spend time with loved ones. The normal schedule will resume on Tuesday, January 3rd. Merry Christmas and Happy New Year!!

Broad Market Notes

  • Composite Breadth Model is Negative
  • 2022 Whipsaws vs 2nd Biggest Gain
  • SPY Reverses For Third Time This Year
  • AAA Yield Spread Widens
  • QT Hits Fed Balance Sheet
  • Bond ETF Breaks Down as 10yr Yield Breaks Out (TLT, $TNX)
  • Dollar Does not React to Yield Breakout (UUP)
  • Gold Battles Falling 200-day SMA (GLD)

ETF Trends, Patterns and Setups

  • Correlations Rise with Market Breakdown (All Sectors Down)
  • Outperforming ETFs Under Pressure (XLU,PHO,XLV,IHF,IBB,PPA,KIE,IGN,SDY)
  • Home Construction ETF Holds Strong (ITB)
  • Tech, Semi and Retail ETFs Break Support (XLK, SOXX, XRT)
  • Consolidations within Downtrends for Tech ETFs: SKYY, CIBR, FINX, FDN, IGV
  • Gold and Silver Lead Precious Metals as Platinum Stalls (GLD, SLV, PLTM)
  • Oil Forms Large Falling Wedge (USO, DBE)
  • Oil Falls, but Energy ETFs Hold Up Well
  • Energy-Related ETFs Firm after Becoming Oversold (XLE, XOP, FCG, XES)
  • Copper Stalls below 200-day as Base Metals Turn Lower (CPER, DBB)
  • Soybeans Maintain Uptrend as Corn Firms (SOYB, CORN)
  • Livestock ETF Holds Up Trend and Trailing Stop (COW)
Thanks for tuning in and have a great day!

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

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