Only three of the sixty ETFs in the core list advanced this week: AGG, TLT and LQD (bonds). Everything else declined, but the biotech ETFs (IBB and XBI) declined the least of the common stock ETFs. The banking and insurance ETFs (KRE, KBE, KIE) led the way lower with the banking ETFs hitting 52-week lows.
Stocks were broad-sided as the stock market fell sharply. Even though the S&P 500 SPDR remains in the falling knife category and has yet to bounce, I am on the look out for ETFs that hold up relatively well during this onslaught. There are several ways to separate ETFs with relatively strong charts and those with relatively weak charts.
Weekend Video, Chart Notes and ChartBook Update ETF Chart Notes for Saturday, February 22nd * These chart notes are also in the ChartBook PDF file (link above) New 52-week Highs (during the week – unadjusted data) Major Index ETFs: SPY, RSP, MDY, QQQ, MTUM, USMV Sector SPDRs: XLK, XLY, XLC, XLP, XLU, XLRE Equal-Weight Sectors: …
Stocks extended their advance this week with most of the ETFs in the core list participating. The flag and pennant breakouts from early February worked as many moved sharply higher the last 12 days (February). QQQ, FINX, XLK, IPAY and IGV are up over 7% this month and leading. Tech, tech and more tech.
The S&P 500 SPDR and Nasdaq 100 ETF led the market by surging to new highs. After a bashing at the end of January, these two came roaring out of the gates and answered with big moves in the first week of February. As the chart below shows, SPY held its early January low during the dip and showed relative strength in late January (less weakness).
My, that was quick. A few days ago, Friday January 31st, to be exact, the S&P 500 SPDR and Russell 2000 ETF were down year-to-date. The S&P 500 had just suffered its worst weekly decline since late July (-2.14%) and the small-cap Russell fell 2.94%. In addition, seven of the twelve sector SPDRs were down year-to-date on January 31st
The bears fired their first shot across the bow this week with sharp declines on Friday and Monday. The bulls were not in the mood to allow even a modest pullback and quickly stepped back into the market. Short-term, an oversold bounce after a 2.5% decline (Friday-Monday) is pretty normal stuff and does not change my overall thesis.
The defensive names further improved this week, while the number of ETFs showing real weakness expanded. ETFs related to bonds, precious metals (sans silver), utilities and REITs remain strong. We saw the 20+ Yr Treasury Bond ETF, Aggregate Bond ETF and Gold SPDR extend further on their falling wedge breakouts. The Utilities SPDR is the leading sector here in January with a 6.24% gain.