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 sheet expanded a little. The breadth models remain firmly bullish as a number of key industry group ETFs go for breakouts. As usual, I also cover the ETFs in the chartbook above.
ETF ChartNotes
Saturday, 7 November 2020
Some ETFs exceeded their September highs in October and recorded 52-week highs this week. Even though some did not record new highs this week, these ETFs were leading prior to the election and remain in strong uptrends. These include: XLY, SOXX, FINX, XRT, ITB, PBW, TAN, XBI, IHI, IHF, PHO
Note that you can copy the comma separated symbols and chart them as Candleglance charts for a quite overview.
SPY is in a long-term uptrend and challenging the upper line of a triangle, which extends back to early September. A consolidation within an uptrend is a bullish continuation pattern and a move to new highs is expected. QQQ and XLK also sport triangles.
QQQ is breaking out of its triangle and XLC broke out with a move above its October highs. Other triangle breakouts include: XLB, FDN, XME
IGV has an Ascending Triangle taking shape since early September and is on the verge of a breakout.
There are some bigger Ascending Triangles out there and these extend back to June. These are bullish continuation patterns an upside breakouts would signal a continuation of the existing uptrend. These ETFs include RSP, IJR and HYG.
ETFs with rising channels are somewhat stronger than those with triangles and Ascending Triangles because they forged higher highs from September to October and October to November. Note that SPY and QQQ have yet to exceed their October highs, which are below their September highs. These ETFs include MDY, IWM and XLI
The Corporate Bond ETF (LQD) broke out of a falling wedge pattern, but the 20+ Yr Treasury Bond ETF (TLT) and Aggregate Bond ETF (AGG) fell short of breakouts. Elsewhere, the Inflation-Indexed Bond ETF (TIP) plunged on Friday and this reflects lower expectations for inflation.
The Dollar Bullish ETF (UUP) formed a triangle within a bigger downtrend and broke triangle support with a sharp decline the last two days. This signals a continuation lower. Weakness in the Dollar put a bid in the Gold SPDR (GLD), which broke out of a falling wedge. This pattern represents a correction (pullback) within a bigger uptrend and the breakout signals a continuation higher. The Silver ETF (SLV) broke out of a triangle consolidation.
