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Treasury Yields, Inflation, Real Yields and Gold – Setting Stops to Filter Out Noise

Bonds and gold were spooked last week as the 20+ Yr Treasury Bond ETF (TLT) fell 4% and the Gold SPDR (GLD) fell 2.81%. Note that GLD surged over 2% on Monday’s open and then fell over 5% the last three days of the week. Wow! Today we will look at the 10-yr Yield, Inflation, the Real Yield and gold. There is an interesting narrative at work, as always, but we are usually better off focusing on the chart of the underlying and ignoring the narrative.

Weekend Video and Chartbook – Breakouts and New Highs Proliferate, Bonds and Gold Get Slammed, ETF Ranking Table

The post-breakout moves in SPY and QQQ look pretty normal, but the 10-week surge in the Russell 2000 ETF looks downright frothy. What else is new. Even so, two S&P 500 medium-term breadth indicators are holding strong and show no signs of deterioration that would suggest a correction. In the ETF Chartbook, we saw lots of consolidation breakouts this week and new highs (closing prices) in seven of the nine sector SPDRs. Bonds took it personal this week as the TLT fell 4%,

Timing Models – Small-caps continue to Lead, Leadership Broadens, Junk Yields Narrow Further

The rally is gaining steam (momentum), the leadership circle is broadening (new highs) and the riskiest stocks are leading (small-caps). We are also starting to see stories suggesting that this rally is unstoppable. Maybe it is, maybe it isn’t. There will be a pullback at some point, but it is much harder to time “overbought” pullbacks than oversold bounces. The big trend and bull market are the dominant forces at work in the

Highlights from the ETF Ranking, Trends and Setups Table

This is an update covering some recent setups on the ETF Ranking, Trends and Setups table. There were no new trend signals over the last two weeks. Only 6 of the 118 ETFs are in downtrends, which are based on StochClose signals. 52 ETFs scored 98 or higher on the 52wk Range score, which means they are at or close to 52-week highs. Even though

ETF Trends, Patterns and Setups – Reopening ETFs Resume the Lead, Healthcare Stays Strong, GLD Breaks Out

Stocks are on the march again with the re-open trade leading the way here in 2021. The year ended with small-caps, retail, banks and energy leading the last two months of the year and this theme picked up again this week. A new year and a new month translates into money ready to go to work and this money found its way into the momentum leaders of the last three months.

ETF Trends, Patterns and Setups – Bull Market, Recent Breakouts, Current Consolidations, Inflationary Pressures

The bull market in stocks remains intact as we start 2021. The S&P 500 SPDR and Nasdaq 100 ETF finished the year at new closing highs, while the Russell 2000 ETF finished less than 2% from its December 23rd closing high, which was a 52-week high. For the year, IWM was up 18.34%, QQQ rose 47.57% and SPY gained 16.16% (sans dividends). Note the Silver ETF kept pace with QQQ in 2020.

ETF Trends, Patterns and Setups – Tech ETFs End 2020 with the Lead – Lots of Consolidations within Uptrends

We have an interesting mix of overbought ETFs and ETFs that are consolidating. ETFs that are overbought are not outright bearish, but they do not have tradable setups. The overbought ETFs are the current leaders because they are the ones with the biggest gains and the ones trading at 52-week highs. ETFs that are consolidating within uptrends have tradable setups, such as bullish flags, pennants

Timing Models – Bulls in Control, but Short-term Participation Narrows

The broad market environment remains bullish, but the picture is turning mixed as fewer stocks follow the major indexes higher. The S&P 500 SPDR, Nasdaq 100 ETF and Russell 2000 ETF moved to new highs this week and are positive the last 16 trading days, but the S&P 500 Equal-weight ETF did not hit a new high this week is down around 1% the last 16 days. The equal-weight S&P 500 represents performance for the “average” stock in the S&P 500. I am also seeing some underlying weakness in short-term breadth for the S&P 500 and the technology sector.

ETF Trends, Patterns and Setups – Techs Extend and Lead, Banks and Energy Stall, Gold Hits Resistance

The bulls remain in the driver’s seat when it comes to stocks. Strength within the stock market is broad with the S&P 500, Nasdaq 100 and Russell 2000 recording new highs here in December. There is also broad strength within the stock-related ETFs with dozens of new highs. Tech-related ETFs reasserted themselves as the true leaders with breakouts in late November and new highs throughout December. Keep in mind that these ETFs also recorded new highs

Weekend Video and Chartbook – Post Breakout Moves, Strong Participation, Tech Retakes the Lead, Short-term Consolidation Breakouts

Today’s video starts with the long-term picture for the big three: SPY, QQQ and IWM. All three are holding their breakouts with IWM extending the furthest and QQQ perking up this past week. We continue to see strong participation in the breadth indicators. Yield spreads remain at normal levels with the junk spreads narrowing even more in December. We will then turn to the new ETF ranking table to show how it can be sorted and viewed. Attention then turns to the ETF ChartBook. The Home Construction ETF (ITB) finally

Timing Models – Breakouts Hold, Breadth Reflects Broad Participation, Fed Balance Sheet Pops

As with many things in life, we are usually better off focusing on the present when it comes to stock market analysis. Focus on what IS happening, as opposed to what MIGHT happen. This is a game of odds and the odds favor a continuation of current conditions, as opposed to a change. The trend, especially an uptrend, is more likely to continue than reverse. There will be plenty of things concerns along the way, but trend is the single most important factor and the trends are clearly up for the major index ETFs.

ETF Trends, Patterns and Setups – Tech ETFs Lead, Signs of Strength and Froth, lntermarket Dynamics

The technology-related ETFs are coming back to life with the Technology SPDR (XLK) and Nasdaq 100 ETF (QQQ) moving to new highs this week. These two are just playing a little catchup because several other tech-related ETFs already hit new highs in late November (SOXX, IGV, SKYY, HACK, FDN, IPAY, FINX). Energy and banks are attracting a lot of attention still, but these tech-related ETFs are the ones trading at new highs.

Exit Strategies – Trend Reversal, Chandelier, Parabolic SAR and ATR Trailing Stop – Resources

Chartists trading oversold bounces and short-term bullish continuation patterns have two basic choices when it comes to an exit: trailing stop or trend reversal. Trailing stops are used initially as stop-losses and then trail price if/when it moves higher. Trend reversal exits are used to accumulate during an uptrend and exit when the longer-term trend reverses. This article will cover the trend reversal exit and three trailing stop alternatives.

Weekend Video and Chartbook – Evidence versus Excess, Breakouts are Holding (not folding) and Bullish Patterns in Several ETFs

There are some signs of excess, but the weight of the evidence remains bullish. Today’s video will shows some excesses and some performance discrepancies since November 9th. Despite these concerns, the breadth models and indicators are bullish. In fact, participation is strong overall and SPY is holding its breakout. Stock alternatives, like TLT and GLD, remain in downtrends, as is the Dollar. We are seeing medium-term breakouts

Timing Models – Broad Participation during Uneven Advance – Evidence Bullish with Signs of Excess

The major index ETFs notched fresh new highs this week with the Russell 2000 ETF leading the way. Despite new highs, the market advance is quite uneven. As of 10AM Friday morning, IWM was up around 1.5% for the week, while SPY was down 1.2% and QQQ was down around 1.6%. It is not often that we see such seesaw action. As we will see in detail below, there is also a significant performance discrepancy since the open on November 9th (vaccine day).

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

Most stock-related ETFs are in uptrends of some sort and many are quite extended after big runs since late October (26 days). ETFs hitting new highs this month are the true leaders (SPY, QQQ, IWM, XME, XRT, SKYY). There is also a group with market-leading gains the last 27 days (since late October), but they are not “true” leaders. The energy-related ETFs (XES, FCG, XOP) are up more than 40%, the Airline (JETS)

Identifying Trend Changes and Tradable Pullbacks within Uptrends (w/ Video)

2021 is just around the corner and chartists without a strategy should think long and hard about getting one. Trading in the direction of the trend is pretty much my bread and butter strategy. I do not fish for bottoms or attempt to pick tops. Tempting as it often is, I try to refrain from such endeavors as much as possible. More often than not, we are better off using trend-following indicators to identify bullish and bearish trend reversals

Timing Models – Trend and Price Action Override Sentiment and Extremes

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.

ETF Trends, Patterns and Setups – New Uptrends Emerge, Mean-Reversions Setups are Scarce and Many ETFs Get Extended

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.

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