Thursday Video – Divided Stock Market, Healthcare Leads, XLK and SOXX Hold Strong, Metals Make a Move (Premium)

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December Schedule

Note that I usually take off between Christmas and New Year, but will make time on Wednesday, December 29th for a commentary/update. The normal commentary schedule will resume on Monday, January 3rd. The holiday scheduling will be as follows:

  • Thursday 23-Dec: Weekly Video
  • Friday 24-Dec: Christmas Eve (day off)
  • Saturday 25-Dec: Christmas Day (day off)
  • Wednesday 29-Dec: ETF/Market Commentary

The stock market is about as divided as can be. It is clear that this is no longer a bull market that lifts all boats. Should we get a bear market, it may not be one that sinks most boats. The Composite Breadth Model is net bearish, but could go either way as the percentage of S&P 1500 stocks above the 200-day SMA gyrates around the 50% level. Even though small-caps and mid-caps are lagging longer term, they are showing signs of strength as Advance-Decline Percent surged three times in December. Elsewhere, yield spreads remain slightly elevated, Treasury yields have yet to break out and gold is breaking out. Defensive groups are leading in the stock market, but so are large-cap tech stocks, semiconductors and housing. Commodities are also performing well as oil maintains its uptrend, agriculture turns up and base metals break out.

       Broad Market Notes

  • Composite Breadth Model Flips to Bearish
  • Market is More Mixed than Bullish or Bearish
  • AAA and BBB Yield Spreads Remain Elevated
  • Fed Balance Sheet Surged to New High (last week)
  • %Above SMA Indicators Reflect Split Market
  • Advance-Decline Percent Leads for Mid and Small Caps
  • SPY and QQQ Consolidate Near Highs
  • IWM and QQQJ Bounce off Support
  • TLT Corrects after Surge
  • GLD Breaks Short-term Resistance (plus SLV)
  • Dollar Stalls after Becoming Oversold

      ETF Trends, Patterns and Setups:

  • ETF Ranking and Trend Table Review
  • Defensive Groups Lead (Utes, Staples, Healthcare, REITs)
  • Medical Devices ETF Goes for Breakout
  • XLK Works its Way Higher as IGN Hits New High
  • Semis and Housing vs Software and Retail
  • ROBO and CIBR Turn Up after Pullbacks
  • Lithium, Strategic Metals and Uranium Become Oversold
  • Water Resources ETF Consolidates within Uptrend
  • Global Carbon ETF and DB Agriculture ETF Pullback after New Highs
  • Electric Vehicle ETFs Pull Back after New Highs
  • Regional Bank ETF Forms Bull Flag after New High
  • Oil Turns Up within Uptrend
  • Energy-related ETFs Form Bull Flags (XES Bounces off Support)
  • Biotech ETF Bounces off Support
  • Metals & Mining SPDR Reverses Downswing within Bigger Pattern
  • Copper ETF Goes for Break Out as DB Base Metals ETF Surges
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
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