Weekend Video – Downside Participation Expands, 8 Sectors Hold Up, 3 Break Down, Commodity ETFs Lead Market (Premium)

Check out the Premium Page (click here) for articles and videos covering trading strategies, seasonality, exits, patterns and more.

Next Week's Publishing Schedule

Tuesday, 25 January: Trend Composite Trends and Signals

Thursday, 27 January: Market/ETF Commentary

Saturday, 29 January: Weekend Video

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

The S&P 500 fell 5.75% this week and this is the biggest weekly decline since March 2020 (covid crash). It was the second biggest decline since October 2020 (5.6%). Declines like this are normally associated with a selling climax that could give way to a short-term oversold bounce. Longer-term, however, we have seen some serious technical damage with bearish breadth thrusts, an expansion of stocks in downtrends and a downtrend signal in the mighty QQQ. The Composite Breadth Model remains net bullish because the S&P 500 EW ETF (RSP) and eight sectors have yet to break their December lows. You read right. XLK, XLY and XLV are the only sectors that broke their December lows. Nevertheless, downside participation is broadening and the majority of the stock market is in bear market mode (small-caps, mid-caps, QQQ, QQQJ). Commodity-related ETFs are still holding up.

       Broad Market Notes

  • Composite Breadth Model Remains Bullish
  • %Above 200-day SMA Indicators Break
  • Bearish Breadth Thrusts in January
  • Correlations are Rising (XLF not immune)
  • AAA and BBB Spreads Widen from Elevated Levels
  • Fed Balance Sheet Surges to New High
  • SPY and RSP Break 200-day SMAs
  • QQQ and MDY Trigger Bearish Trend Signals
  • Small Caps and High Beta Lead Lower
  • Bonds and Dollar Forge Short-term Reversals
  • Gold and Silver Near Range Resistance

      ETF Trends, Patterns and Setups:

  • 52 Week Low List is Long and 14 New Downtrends
  • Sectors Holding Well Above December Lows: XLE, XLP, XLU
  • Sectors Nearing December Lows: XLF, XLI, XLV, XLB, XLRE
  • Sectors Breaking December Lows: XLK, XLY, XLC (50% of SPY)
  • Global Carbon ETF Consolidates above December Low (KRBN)
  • Oil and Energy ETFs Edge Lower after New High (DBE, FCG, XOP, XES)
  • Copper ETFs Fall Back after Breakout Advances (CPER, COPX, DBB)
  • DB Agriculture ETF Edges Lower after New High (DBA)
  • Banking ETFs Succumb to Broad Market Pressure (KRE, KBE)
  • Nearing December Lows (IFRA, IHF, XME)
  • Strategic Metals ETF Fails to Hold Breakout (REMX)
  • Lithium Battery Tech ETF: Correction or Downtrend? (LIT)
  • Electric Vehicle ETFs Succumb to Broad Market Pressure (DRIV, IDRV, CARZ)
  • Semis and Networking Join the December Break Club (FIVG, SOXX, IGN)
  • Medical Devices ETF Breaks December Low (IHI)
  • Online Retail Hits 52wk Low as Retail ETF Nears 52wk Low (IBUY, XRT)
Thanks for tuning in and have a great weekend!

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

Scroll to Top