Weekend Video and ChartBook Update

ETF Chart Notes for Saturday, December 14th

* These chart notes are also in the ChartBook PDF file (link above)

Weekly Performance Metrics for Core ETF List (60 ETFs)

New 52-week Highs
Major Index ETFs: SPY, RSP, MDY, IJR, IWM, QQQ
Sector SPDRs: XLK, XLF, XLC, XLV, XLP, XLB
Industry Group ETFs: BOTZ, SOXX, KBE, KRE, KIE, IBB, XBI
Other: VIG, EFA

This Week’s Leaders: REMX +4.73%, SOXX +4.32%, XES +4.26%, MJ +3.86%, TAN +3.23%, IEMG +2.99%, FCG +2.93%, GDX +2.78%, XOP +2.5%

This Week’s Laggards: SKYY-0.37%, XLC-0.38%, XHB-0.43%, UUP-0.45%, ITA-0.52%, FINX-0.67%, IHF-0.98%, XLRE-2.41%, IYR-2.56%

– Even though stocks sold off on Friday, SPY, QQQ, MDY and IWM closed up for the week and hit new highs. A mild one day sell off is just noise within an uptrend.

– 21 of the 51 equity-related ETFs in the Core ETF List hit 52-week highs. This shows broad strength in the stock market. ETFs include Tech, Finance, Healthcare, Biotech, Banking, and Semis.

– SPY is back to its low volatility advance with ROC(1) not dipping below -1% for nine weeks now, ATR(2) back above 30 and S&P 500 %Above 20-day EMA (!GT20SPX) above 50%.

– RSI(10) bounced off the 40-50 zone for SPY and QQQ in early December. The dip into the 40-50 zone represented a mild, very mild, oversold condition that gave way to a bounce.

–  RSP, MDY, IWM and IJR broke out in early November, held their breakouts and turned choppy the last two weeks. The breakouts are holding and this is key. While a dip back into the breakout zones might seem negative, it could create an oversold condition and opportunity.

– USMV and XLP continued on their slow slog higher. They are underperforming relative to other ETFs, but still in stable uptrends.

–  XLY bounced off support extending back to early November and the larger Ascending Triangle remains in play. HGY surged to the upper line of its Ascending Triangle and looks poised for a breakout.

–  XLI, XLB and XLC are consolidating just above their breakout zones.

–  XLV, IBB and XBI remain extended, but have yet to reverse their short-term uptrends.

–  XLU is holding up and has yet to break short-term support. Thus, the mean-reversion bounce remains in play and a break below 62.4 would be negative. XLRE is not faring as well and broke its 200-day SMA this week.

–  SKYY, FINX and IGV fell back after their breakouts, but the breakout zones are holding and these pullbacks are deemed small corrections within a bigger uptrend. FDN is also holding support. RSI(10) bounced off the 40-50 zone for all four ETFs. The breakouts remain in play for now and these charts are still bullish.

–  IPAY showed some leadership with a nice bounce over the last three days. The November breakout remains in play and this ETF appears headed for a new high. SOXX and BOTZ hit new highs to lead.

–  ITB and XBH continued their stall within an uptrend. A consolidation within an uptrend is typically a bullish continuation patters. We are also in a bull market so the odds favor a continuation higher at some point.

–  KBE and KRE led the market this week with big surges on Thursday. They fell back some on Friday, but their bigger breakouts remain in play.

–  KIE, ITA and VIG remain in their tortoise uptrends.

–  IHI continues to show strength as it works its way higher after the mid November breakout.

–  GDX and GLD are not backing down as both moved higher and are set to challenge wedge resistance. The big advances from May to August look like two steps forward, while the falling wedge looks like one step backward. Breakouts would be bullish. UUP fell sharply the last 12 days, but remains above its rising 200-day SMA.

–  The falling wedges in TLT and AGG look just like those GDX and GLD. Who would have thought.

–  XME is getting extended after a 16% advance in 10 weeks. The Double Bottom breakout is bullish, but their could be a throwback to the breakout zone, which turns first support (27-28).

–   LQD is the leading bond ETF with a triangle breakout in late November. This breakout held as the ETF consolidated and then closed strong on Friday. HYG is challenging resistance from a bullish Ascending Triangle pattern.

–   Weakness in the Dollar helped the two foreign-equity ETFs, EFA and IEMG, to big gains the last eight days.

Enjoy your weekend!

-Arthur Hill, CMT
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