Market/ETF Video – Bonds Plunge with Outsized Move, Oil and Metals Weak on Demand Destruction, Dollar Goes Parabolic, Wheat and Coffee Hold Up (Premium)

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Market/ETF Review and Outlook Video

The Composite Breadth Model remains bearish with all five inputs negative and yield spreads are on the rise as the CCC spread widened to a new high. Taken together, this means the Market Regime is bearish for stocks and risk is above average. Bonds and gold do not offer alternatives as TLT and GLD hit new lows. Industrial commodities are suffering from demand destruction as oil and base metals trend lower along with stocks and the economic outlook. The Dollar, which represents the risk off trade, is going parabolic as money moves out of the UK and Europe. Only 12 of the ETFs in the Master List are in downtrends and only one ETF in the All Weather list is in an uptrend. Dirty energy and clean energy could not escape the wrath of the bear as these two groups were hit hard over the last two weeks. Biotech is holding up reasonably well, but also fell the last few weeks. Even the so-called safe-haven and defensive groups were hit hard as utilities, consumer staples, low volatility and high dividend were hit.

       Broad Market Notes

  • Composite Breadth Model Remains Bearish
  • %Above 200-day SMA Indicators are below 15%
  • CCC Spreads Widen to New Highs
  • Junk Bond ETF Hits New Low  
  • Bond ETFs Hit New Lows as 10yr Yield Pushes 4%
  • Oil Remains in Downtrend as Natty Attempts to Firm
  • Gold Follows Bonds to New Low
  • DB Base Metals ETF Tests Summer Low
  • DB Agriculture ETF Breaks Wedge Support
  • Dollar Bullish ETF Goes Parabolic

      ETF Trends, Patterns and Setups:

  • Only 12 Uptrends in Master ETF List (274)
  • Only 1 Uptrend in All Weather List (50)
  • SPY and IWM Lead Lower with 52wk Lows (QQQ is Close)
  • Low Volatility and Dividend ETFs are Not Immune (SPLV, USMV, DVY)
  • 8 of 11 Sectors Hit New Lows (all 11 in Downtrends)
  • Semis, Software, Autos and Retail Hit New Lows (SOXX, IGV, XRT, CARZ)
  • Housing and Banks Above Summer Lows, but… (ITB, KRE)
  • Bear Market Weighs on Clean Energy and Uranium ETFs (TAN, ICLN, ACES, URA)
  • Energy ETFs Turns Bearish as Oil Falls (XLE, FCG, XES)
  • Biotech SPDR Holds Up Better than IBB (XBI)
  • DB Commodity and Energy ETFs Extend after Breakdown (DBC, DBE)
  • Palladium ETF Holds Up with Grind Higher (PALL)
  • Silver Pennant Breakout Fails as Copper Extends Lower (SLV, CPER)
  • Coffee Holds Flag Breakout as Wheat Maintains Upswing (JO, WEAT)
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
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