ETF Trends, Patterns and Setups – True Leaders and New Leaders, Big Runs and High RSI Values

ETF ChartBook ETF Rankings The weight of the evidence is clearly bullish and we are seeing some fresh breakouts this

Outside of sentiment and some extremes in price and breadth, one would be hard pressed to find negatives in the stock market right now. Stocks and risk assets are rising, while Treasury bonds and safe-havens are out of favor. Since November, SPY and QQQ are up more than 12% and IWM is up more than 20%. Oil and copper are up double digits. Clearly, the reopening trade has center stage.

There are lots of long-term uptrends in the equity-related ETFs, but there are not many short-term bullish setups. Most of the setups materialized in early November as stocks declined in October and RSI moved into the oversold zone for dozens of ETFs. With the November surge, RSI moved above 70 within the last five days for more than half of the equity-related ETFs in the Core List.

Today’s report is a bit of a hodge-podge. There are signs of extreme in some breadth indicators, but signs of extreme are not very good when it comes to timing because indicators can remain near extremes for a few months. I will then turn to the new breadth signal in the Energy SPDR (XLE) and the breakout on the chart. Even though Energy and Banks are leading the last three months, let’s not forget about the tech-related ETFs, which are breaking out to new highs and truly leading.

Today’s video starts with the current weight of the evidence, which is bullish. We then turn to some signs of excess, which could be just noise to keep us on our toes. Most importantly, SPY is holding its triangle breakout and QQQ is on the verge of a breakout. The technicals remain bullish until they aren’t (proven otherwise). Outside of the technicals, yield spreads continue to narrow and the Fed balance sheet continues to expand. We will also look at a weak Dollar, the downtrend in Gold and the resistance challenge in TLT, as well as the charts in the ETF ChartBook.

The weight of the evidence remains bullish, but there are some concerns with excesses in the S&P 500 and underperformance in prior leaders. The excesses are a result of the recent rotations as money moved into the lagging groups: finance and energy. This pushed many of their component stocks above their 200-day SMAs. Money did not exactly move out of the leading groups because they simply consolidated, as

We never know if a consolidation will mark a top or a bullish continuation pattern. Three out of four times (guesstimate), a consolidation within an uptrend is a bullish continuation pattern that resolves to the upside. Sometimes, however, a consolidation is resolved on the downside and results in a reversal. This is the concern going forward for several

Today’s video starts with the bullish evidence because we are clearly in a bull market. SPY (large-caps) and IWM (small-caps) hit new highs, the last ROC shock was bullish, the breadth models are bullish and a array of ETFs broke out of bullish continuation patterns this week. Even though the bulk of the evidence is bullish, we cannot let our guard down because there are some signs of excess that could hamper the

The bulk of the evidence remains bullish, but signs of excess and above average volatility are creeping into the picture. In addition, QQQ did not confirm this week’s new high in SPY and large-cap techs are dragging their feet. Today we will review this week’s unusual price action and quantify excesses with %Above 200-day SMA.

Don’t like the current rotations in the stock market? Wait a week and it will change. Tech stocks led the market higher immediately after the election with big moves last Wednesday, Thursday and Friday. The reflation trade then took over this week as some of the worst performing groups surged (finance, defense, banks, energy). Money moved out of tech and lockdown related ETFs to fund this rotation.

Today’s video starts with a broad market overview. The swings in SPY could widen further with another ROC shock this past week. Volatility is increasing, but the trends are up and price action remains bullish. We then look at the breakdown in the Dollar, the breakout in gold and the downtrend in Treasury Bonds. BBB yield spreads narrowed significantly over the last week or so and the Fed balance

Pretty much everything moved higher the last four days. Well, everything but the Dollar. Stocks surged with QQQ leading the charge. Money did not rotate out of safe-haven bonds as the 20+ Yr Treasury Bond ETF and Corporate Bond ETF gained over 2%. Oil was up over 7%, copper was up around 2% and the Gold SPDR took advantage of Dollar weakness

The charts are full of bullish consolidation patterns over the last one to two months. There are triangles, flat consolidations and falling channels. These patterns, when forming after a big advance, represent a correction and a bullish resolution is expected. Why? Because the path of least resistance is up when the bigger trends are up and the breadth models are bullish.

Today’s video starts with the S&P 500 SPDR to put the four week reversal and outsized decline into perspective. We will look at performance since the early September ROC shock, weigh the long-term evidence and compare the current setup with November 2016. Bank ETFs stood out this week as they bucked broad selling pressure and small-caps are holding up better than large-caps.

The S&P 500 SPDR shows a reversal in the making when we focus on the candlesticks the last four weeks, but the overall trend remains up and the Trend Breadth Models have yet to flip. The chart below shows SPY with a long white candlestick four weeks ago, two indecisive candlesticks and a long black candlestick this week. Despite the extra candlestick, these four clearly capture the essence

Last week I wrote about a possible changing of the guard, and Wednesday I had to rein in the bulls as small-caps and banks got cold feet. While the sudden change of heart over the last three days is not quite as dramatic as the rise from the ashes in late September, it is a warning shot across the bow for the stock market. Small-caps, mid-caps and banks are simply not performing that well this year.

Small-caps and banks went from potential leaders to potential failures over the past week. Basically, the markets got cold feet on the reflation/value trade and bailed the last two days. I do not know if this is just pre-election jitters, but there are a lot of BIG unknowns out there right now. These include the uneven rebound in stocks, election, covid,

This article updates the ATR Trailing Stop and show how anyone can chart it. As noted in the first part, the Chandelier Exit and Parabolic SAR are lacking as far as I am concerned. The Chandelier Exit is fixed to the high based on a lookback period, which may or may not fit the current trade. Parabolic SAR is too volatile and complicated.

Today’s video starts with a weekly chart of the S&P 500 SPDR to show how stocks are digesting the gains from the prior two weeks. This two week digestion formed small flags on many charts and the leaders are already breaking out. Leadership, however, is changing as techs sag a little. Small-caps, mid-caps, banks and utilities