Weekend Review and Setups – A Mixed Market as Earnings Season Hits

While the S&P 500 and large-caps hold up well, small-caps and mid-caps continue to trade mixed. This suggest that the average stock is trading mixed, some up and some down. Even though we are not in a bear market environment, stock picking is challenging right now and we should lower our expectations, and perhaps exposure.

The mixed nature of the market is also reflected in the price charts for the major index ETFs. SPY and QQQ have traded flat since July (3 months). The Russell 2000 ETF has been working its way lower since April and the S&P MidCap 400 SPDR has been flat since April. The consolidations in SPY and QQQ come after new highs and both are within 2% of their all time highs. IWM is some 13% below its 2018 high and MDY is 6% below.

State of the Stock Market Overview

  • Mixed market, but still net bullish
  • Large-caps leading and small-caps lagging
  • Russell 2000 ETF trending lower since April
  • S&P MidCap 400 SPDR range bound since April
  • Index Breadth Model: 6 of 9 indicators bullish
  • SPX Sector Breadth Model: +70% bullish
  • SPY above 200-day and 20-day above 200-day
  • SPY and 6 big sectors bounced off August lows (key support)
  • Fed balance sheet is expanding
  • Click here for the State of the Stock Market Report.

Short-term Keys to Watch Next Week

Stock Setups

There are only four setups this week because too many stocks report earnings within the next two weeks and the market is mixed. These charts are not linked because they are simple and can be easily recreated on other charting platforms.

This Week on TrendInvestorPro.com

Saturday – 19-Oct: Few New Highs, but Even Fewer New Lows – Watching the Sector High-Low Lines for Clues on the Current Upswing

Friday – 18-Oct: The State of the Stock Market – There are Two Sides to Every Coin – Don’t Forget to Consider Both

Thursday – 17-Oct: ETF Ranking and Grouping – Some Long-term Laggards Start Showing Signs of Relative Strength

Thursday – 17-Oct: ETF ChartBook – Table showing ETF Rankings and Grouping plus all 60 ETF charts with annotations and comments.

-Arthur Hill, CMT
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