Market/ETF Video – Volatility Remains High, Big Sectors Fail in Unison, Defensive Groups not Immune, Agriculture ETFs Hold Up (Premium)

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Market/ETF Review and Outlook Video

The weight of the evidence remains bearish for stocks and volatility is above average. Throw in elevated yield spreads and a hawkish Fed, and you have a bearish Market Regime for stocks. Bear markets are bear markets because the vast majority of stocks participate (upwards of 80%). A select few groups may buck the bears, but picking winners is difficult in such an environment. Pickings are also relatively slim outside of the stock market because bonds are trending lower, base metals broke down, gold is near a new low and oil has been trending lower since mid June. Agriculture is holding up relatively well and the Dollar remains in a strong uptrend.

       Broad Market Notes

  • Composite Breadth Model Remains Bearish
  • Advance-Decline Percent Indicators Plunge
  • A Bull Market in Volatility
  • BBB Spreads Widening Overall as Fed Balance Sheet Contracts
  • TLT Moves to New Low as 10yr Yield Challenges June High
  • Oil Trends Lower as NatGas Bounces off Support (plus DBE)
  • Gold Pops and Drops within Downtrend
  • DB Base Metals ETF Bounces after Breakdown
  • DB Agriculture ETF Holds Rising Wedge Advance
  • Dollar Bullish ETF Surges Along with the 10-yr Treasury Yield

      ETF Trends, Patterns and Setups:

  • New Uptrend Signals for an Energy ETF and an Agricultural Commodity
  • Scattered Uptrends within a Sea of Downtrends
  • SPY, QQQ and IWM Establish Resistance with Sharp Decline
  • Defensive Groups Not Immune (SPLV, XLV, IHF, XLU, PHO, XLP, PBJ, DVY)
  • Big Sectors Mimic SPY with XLK Lagging (plus RCD)
  • Housing and Semis Lead Lower with September Closing Low (ITB, SOXX)
  • Some Tech Based ETFs have Stopped Underperforming, But.. (IGV, CIBR, SKYY, IPAY)
  • Aerospace & Defense ETF Swings Lower with Broader Market (PPA)
  • Clean Energy ETFs Correct after Breakouts (TAN, ICLN, PBW, ACES)
  • Energy-based ETFs Hold Stops and Maintain Uptrends (XLE, XOP, FCG)
  • A Bearish Alternative for the Oil & Gas Equipment & Services ETF (XES, PSCE)
  • Biotech ETFs Hit Falling 200-day SMAs and Fall Hard (IBB, XBI)
  • Uranium ETF Maintains Upswing (URA)
  • Copper and Copper Miners ETFs Establish Resistance (COPX, CPER)
  • DB Commodity and Energy ETFs Battle Rising 200-day SMAs (DBC, DBE)
  • Palladium ETF Takes a Hit, but Maintains Upswing (PALL)
  • Coffee ETF Pulls Back after Breakout (JO)
  • Wheat ETF Goes for a Breakouts (WEAT, plus SOYB, CORN, COW)
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
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