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!