Market/ETF Video – Volatile Price Action with Downtrend, TLT Hits New Low, Only A Handful of Uptrends in the ETF Universe (Premium)

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Market/ETF Review and Outlook Video

The Composite Breadth Model remains bearish, yield spreads remain elevated and the overall environment for stocks remains bearish. Price action in the major index ETFs turned choppy and volatile the last few weeks, but this is considered noise within a larger downtrend. September and October are two of the more volatile months of the year so extra volatility should not come as a surprise. Elsewhere, the 10-yr Treasury Yield is near 4% and near its high of the year and the Dollar is in an uptrend. The pickings are extremely thin within the ETF universe because the vast majority are in downtrends. Some ETFs are holding up better than others though and we will highlight ETFs related to biotech, energy, networking, defense and regional banks. Keep in mind, however, that we are still in a bear market and risk is above average for stock-based ETFs.

Broad Market Notes

  • Composite Breadth Model Remains Bearish
  • Fed Balance Sheet Reflects QT
  • CCC and BBB Spreads Remain Elevated
  • SPY Turns Volatile as QQQ Leads Lower
  • Small-caps Hold Up, but Ignoring Short-term Reversals
  • TLT hits New Low as 10yr Yield Hits 4%
  • Dollar Bullish ETF Stalls within Uptrend
  • Gold Falls Back Towards September Lows

ETF Trends, Patterns and Setups

  • Only 7 (2.5%) of 274 ETFs in Uptrends
  • Biotech SPDR Holds Up, but Palladium ETF Tests Support (XBI, IBB, PALL)
  • Trend Composite Turns Bullish for Livestock ETF (COW)
  • XLK, XLF, XLI, XLC, XLP, XLRE and XLU Bounce from 52-week Lows
  • XLV Holds Above Summer Lows, but Still in Downtrend
  • Tech ETFs Bounce from 52wk Lows (SKYY, CIBR, FINX, FDN, SOXX, IGV)
  • Networking ETF Is Best Performing Tech ETF (IGN)
  • Aerospace & Defense ETF Reverses Downswing with Gap-Surge (PPA)
  • The Siren Song from the Home Construction ETF (ITB)
  • Retail, EW Discretionary and Autos Bounce from 52wk Lows (XRT, RCD, CARZ)
  • Regional Bank ETF Breaks Early October High, But… (KRE)
  • Oil Hits Resistance Zone and Falls Sharply
  • DB Energy ETF Tests 200-day SMA (DBE, DBC)
  • Energy ETFs Hold Up Despite Drop in Oil (XLE, XOP, FCG, XES)
  • DB Base Metals ETF Nears Jul-Sep Lows
  • Agribusiness and Copper Miners ETFs Consolidate within Downtrends (MOO, COPX)
  • DB Agriculture ETF Tests Aug-Sep Lows
  • Wheat ETF Tests Support as Corn ETF Holds Up (WEAT, CORN)
  • Soybeans Looks Poised for a Breakdown (SOYB)
Thanks for tuning in and have a great day!

-Arthur Hill, CMT
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