Timing Models – QQQ Reverses Short-term Uptrend, 3 Big Sectors Weigh, Medium-term Participation Wanes within SPX (Premium)

Trend/Signal Summary

The long-term evidence (primary trend) is bullish, but we are seeing some short-term weakness (secondary trend). This is especially true in the Nasdaq 100 and Technology sector. SPY is holding up better because the Finance, Industrials and Communication Services are picking up the slack. The table below summarizes the broad market environment using the major index ETFs, sectors, trend signals, breadth models and breadth indicators. These are all covered in the charts below.

  • SPY is in a primary uptrend and secondary uptrend.
  • QQQ is in a primary uptrend and secondary downtrend (correction).
  • IWM is in a primary uptrend and secondary uptrend.
  • S&P 500 5-day crossed above the 200-day SMA on May 29th (uptrend).
  • SPX Trend Breadth Model is bullish (since July 20th)
  • SPX Thrust Breadth Model is bullish (since April 29th).
  • SPX %Above 50-day weakened, but has yet to break.
  • NDX %Above 50-day weakened and then plunged below 50%
  • Major index StochClose signals are majority bullish (since May 29th).
  • Key sector StochClose signals are majority bullish (since April 30th).
  • The Fed Balance sheet expanded by $33 billion and hit a new high.
  • Yield spreads remain low as the 10-year Treasury yield surges.

QQQ Turns Negative on the Year

Three of the Big Five Sectors Struggle

QQQ Leads the Pullback

Trend and Thrust Breadth Models

Trend Models

Thrust Models

You can learn more about the methodology and
historical performance for these breadth models in this article.

Index and Sector StochClose Models

Click here for an article explaining the StochClose models.
(test results are at the end of the article).

Yield Spreads and Fed Balance Sheet

Thanks for tuning in and have a great day!

-Arthur Hill, CMT
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