Weekend Video – Big Pockets of Weakness, Yield Spreads Remain Elevated, Commodity ETFs are Leading (Premium)

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Next Week's Publishing Schedule

Tuesday, 15 February: Portfolio Level Testing for the Trend Composite Strategy

Thursday, 17 February: Market/ETF Commentary

Saturday, 19 February: Weekend Video

Note that I am aiming to post between 8 and 8:30 AM ET.

The Composite Breadth Model is net bullish because the 5-day SMA for the S&P 500 is above the 200-day SMA. Even so, some 55% of S&P 500 stocks are below their 200-day SMAs and fewer than 40% of mid-caps and small-caps are above their 200-day SMAs. There are more long-term downtrends than uptrends right now. Also note that yield spreads remain elevated, the Junk Bond ETF (JNK) hit a new low and the BBB Bond ETF (MBBB) plunged. The credit markets are showing some stress. Commodity-related ETFs continue to lead with oil the strongest and gold finding a big bid on Friday. Utilities, Staples and Finance related ETFs remain in uptrends, but might not be immune to broad market weakness.

       Broad Market Notes

  • Composite Breadth Model is Bullish, but…
  • %Above SMA Indicators Are More Bearish than Bullish
  • Yield Spreads Remain Elevated
  • JNK and MBBB Lead Corporate Bonds Lower
  • Fed Balance Sheet Expands a Small Amount
  • SPY and QQQ Reverse Short-term Upswings
  • Small and Mid Caps Hold Up Better (short-term, not long-term)
  • 20+ Yr Treasury Bond ETF Gets a Safe Haven Bounce
  • Gold Surges within Uptrend and Silver Follows
  • Dollar Bounces after Sharp Pullback within Uptrend

      ETF Trends, Patterns and Setups:

  • Commodity ETFs Lead New High List and Junk Bond ETFs Lead New Low List
  • Energy ETFs Lead with Uptrends and New Highs (XLE, FCG, XOP – plus XES)
  • Steel ETFs Perk Up with Break Outs (XME, SLX)
  • Agriculture Related ETFs Hit New Highs with Big February (DBA, MOO)
  • Global Carbon ETF Holds Near Breakout Zone (KRBN)
  • Finance and Banks are in Uptrends, but Not Immune (XLF, KRE, KIE)
  • Utes and Staples are Defensive, but Not Always Immune (XLU, XLP, PBJ)
  • Copper Miners and Metals Extend Uptrends, but Copper Gets Hit (COPX, CPER, DBB)
  • Residential REIT ETF Holds Up Fairly Well (REZ)
  • Watching Small Wedge in the Infrastructure ETF (IFRA)
  • Big Sectors with Impulse Declines, Upswings, Upswing Reversals (XLK, XLY, XLV)
  • Range Bound, Near Range Lows, Weak February Bounce (XLI, XLB, ITB, XHB)
  • Electric Vehicle ETFs Remain a Right Mess (DRIV, CARZ)
  • 3 Tech ETFs: IGN and SOXX Reverse Upswings and CIBR Falls with Market
Thanks for tuning in and have a great weekend!

-Arthur Hill, CMT
Choose a Strategy, Develop a Plan and Follow a Process

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