The markets are dealing with some serious systematic shocks and volatility remains well above average across the board. First and foremost, the Composite Breadth Model is
This video starts with broad market analysis and then moves to the individual ETFs. The broad market section includes the Composite Breadth Model, Fed balance sheet and yield spreads. Breadth indicators, SPY, QQQ, bonds, gold and the Dollar are also covered.
The Composite Breadth Model is bearish so I am focused on ETFs that are not correlated to stocks (commodities), ETFs that are defensive (staples, utilities) and ETFs that are perhaps less correlated to stocks (agribusiness, steel, defense). Volatility is
The Composite Breadth Model remains bearish and the S&P 500 SPDR is in a downtrend since the January breakdown. The S&P SmallCap 600 SPDR (IJR) held up a little better than SPY in January-February, but remains short of a resistance breakout that would negate the January breakdown. In short, the trends
The markets are getting rattled with big moves after the invasion of Ukraine, but these moves are in the direction of existing trends. Oil, industrial metals, gold and agriculture were already in market leading uptrends. They are also up strong today. SPY, QQQ and many ETFs were already in downtrends after impulse declines in January. There were oversold bounces in February, but
Today’s article is the fourth installment in the Trend Composite series. We started with an introduction to the Trend Composite, tested uptrend/downtrend signals and then moved to portfolio level testing using StochClose as the tiebreak. Today we focus more on StochClose rank by using
The Composite Breadth Model flipped back to bearish this week as the S&P 500 led the broad market lower. New lows expanded and some 60% of stocks in the S&P 1500 are below their 200-day SMAs. Throw in widening yield spreads and the Market Regime is clearly
A charting strategy is essential because it increases objectivity and improves the odds of success. A basic chart strategy is similar to basic black jack strategy. In his classic book, Beat the Dealer, Edward Thorp, lays out a basic black jack strategy with a set of rules to improve the odds. Once players master basic strategy, they can move on to card counting and such to further improve performance.
The stock market is as divided as ever with the pockets of weakness at the risk-on end. Risk-off ETFs and commodity-related ETFs are performing the best right now. Finance-related ETFs are also holding their own as the 10-yr Treasury Yield exceeds 2%. There are some
Today’s article is the third installment of the Trend Composite series, which is working towards a trend-momentum strategy for trading ETFs. Today we will move from “All Signals” testing to portfolio level testing. We will first use uptrend/downtrend signals
The Composite Breadth Model is net bullish because the 5-day SMA for the S&P 500 is above the 200-day SMA. Even so, some 55% of S&P 500 stocks are below their 200-day SMAs and fewer than 40% of mid-caps and small-caps are above their 200-day SMAs. There are more long-term downtrends than
February is the month of the big bounce. As is normal after a big decline, names that led the way lower and fell the most are getting the biggest bounces. Most of the ETFs with the biggest bounces were in downtrends already and these are still considered oversold bounces within downtrends.
The Composite Breadth Model combines short-term thrust indicators, long-term trend indicators and S&P 500 trend signals to define the broad market environment: bull market or bear market. The idea is to take risks during bull markets and seek safety during bear markets
Strength within the S&P 500 flipped the Composite Breadth Model bullish this week, but the %Above 200-day SMA and High-Low Percent indicators show more pockets of weakness than strength in the broader market (S&P 1500). The Trend Composite is bearish for all
Small-caps were the talk of the town in mid November as they broke out of a seven month range and the skies opened up. Volatility then reared its ugly head in late November when the Russell 2000 ETF (IWM) fell some 12 percent from a new high. IWM continued lower in January and hit a 52-week low. The Russell 2000 Growth ETF (IWO) led the way as money fled high-beta stocks and ETFs.
This is the first article in a new strategy series that will extend over the next several weeks. We will start by defining the Trend Composite indicator and then work our way towards a systematic trading strategy. The strategy is based on signals from the Trend Composite.
January was a rough month for stocks so far as QQQ fell 11.6% and IWM fell 12.2%. SPY and the S&P 500 EW ETF (RSP) held up much better with declines of around 6%. Again, we are seeing more weakness in mid-caps, small-caps
There were lots of downtrend signals this past week and over the past month. Selling pressure expanded and broadening participation on the downside was enough to push the Composite Breadth Model back into bear market mode. Note that I will update the Market Regime page on Friday morning. For now, the pickings are slim among the equity-related ETFs
The Composite Breadth Model has yet to trigger bearish as stocks recovered on Monday and closed strong. Despite this reversal, the technical damage has already been done to several big sectors and key industry group ETFs. Even so, the S&P 500 EW ETF (RSP) managed to hold its
The S&P 500 fell 5.75% this week and this as the biggest weekly decline since March 2020 (covid crash). It was the second biggest weekly decline since October 2020 (5.6%). Declines like this are normally associated with a selling climax that could give way to a short-term oversold bounce. Longer-term, however,
Stocks continued their recent ways with small-caps (IWM) and high-beta tech stocks (QQQJ) leading the way lower in January. IWM is down around 8% year-to-date and QQQJ is down around 11%. The year is starting just how it ended: growth and high beta remain out