Market/ETF Video – CBM Moves to -1, Big Falling Wedge vs Small Rising Wedge, Defensive ETFs Correct in 2023 (Premium)

Market/ETF Review and Outlook Video

The Composite Breadth Model improved, but remains negative and the market is at a critical level. A critical level means we are at a moment of truth or a make or break point. One more push higher would turn the CBM positive and trigger a big wedge breakout in SPY. Failure to push higher could lead to a short-term reversal and a continuation of the bear market. See the Market Regime page for updated charts and analysis. Elsewhere, I updated the status for two mean-reversion signals (XLP, SPLV). The defensive ETFs that led in 2022 are lagging in 2023, but their recent declines look like pullbacks after a sharp advance.

Broad Market Notes

  • CBM Improves, but Remains Negative
  • Large-caps and Mid-caps Lead
  • The Key Level for the Falling Wedge
  • Watching the Short-term Rising Wedge
  • SPX %Above 20-day Breaks 60%
  • Yield Spreads in Downtrend (Narrowing)
  • QQQ Bounces within Downtrend
  • IWM Outperforms and Challenges Nov-Dec High
  • Short-term Support to Watch for 20+ Yr Treasury Bond ETF
  • 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

  • RSI(2) Crosses above 70 for XLP (mean-reversion follow up SPLV)
  • Tech and Staples Tell the Story in January
  • 2023 Leaders were Laggards in 2022 (defense vs offense)
  • Lagging Defensive ETFs Have Bullish Setups (SPLV, XLP, XLU, PHO, KIE)
  • Healthcare SPDR Forms Wedge Correction (XLV)
  • Aerospace & Defense ETF Consolidates after Surge (PPA)
  • QQQ and XLK are Still in Long-term Downtrends
  • Semiconductor ETF Breaks December High (SOXX)
  • Fragile Wedge Breakout within Downtrend for the Cybersecurity (CIBR)
  • Software ETF Challenges December High (IGV)
  • Biotech ETF Extends on Wedge Breakout (IBB,  plus XBI)
  • Home Construction ETF Continues to Lead (ITB)
  • Energy SPDR Holds Triangle Breakout (XLE)
  • XOP and FCG Break Out of Wedges (plus AMLP)
  • Silver Stalls After Big Surge (SLV)
  • Platinum ETF Forms Bull Flag (PLTM)
  • Base Metals are Strong, but Extended (DBB, plus CPER)
  • Palladium ETF Firms within Downtrend (PALL)
Thanks for tuning in and have a great day!

-Arthur Hill, CMT
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