Market/ETF Video – Weight of the Evidence is Bearish, but Bulls are Still Fighting (Premium)

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Market/ETF Review and Outlook Video

The weight of the evidence for the stock market remains more bearish that bullish. More stocks are below their 200-day SMAs than above, volatility is above average for SPY and the Composite Breadth Model is net bearish. Nevertheless, the S&P 500 SPDR and the S&P 500 EW ETF are trying to forge short-term reversals with big moves on Tuesday. Let’s face it. The stock market has a bullish bias and this makes it incredibly difficult to make money shorting stocks. My basic strategy is to trade bullish setups within uptrends and to focus on stock-related ETFs when the Composite Breadth Model is bullish. Even though QQQ and some others are trying to bottom, I am not a bottom picker and am not focused on these setups because they do not fit my strategy. Instead, I remain focused on ETFs with uptrends and short-term bullish patterns, several of which are highlighted in the video below.

       Broad Market Notes

  • Composite Breadth Model is Bearish and Mixed
  • 5/200 Cross as a Risk Calculation
  • Average 1-day Change in SPY and QQQ
  • Some 60% of S&P 1500 Stocks below their 200-day SMAs
  • SPY and QQQ Go for Short-term Reversals within Bigger Downtrends
  • S&P 500 EW ETF and S&P MidCap 400 SPDR Show Short-term Strength
  • S&P SmallCap 600 SPDR is Just a Mess
  • TLT Plunges to New Lows Again
  • TLT Drags the Whole Bond Market Lower (TIP, JNK)
  • BBB and CCC Spreads Remain Elevated
  • GLD and SLV Fall Back after Breakouts
  • UUP Extends to New Highs

      ETF Trends, Patterns and Setups:

  • ETF Trend Signal and Ranking Table Review
  • Check the Chart when Seeing New Signals (BUG)
  • Energy ETFs are Still the Leaders (XLE, PSCE, XES, FCG)
  • Oil with Big Swings within Bigger Bullish Consolidation
  • Offensive Sectors Bounce within Downtrends (2/3 of S&P 500)
  • Defensive Sectors in Leading Uptrends (XLP, PBJ, XLU, IFRA, XLV, IHF)
  • Materials SPDR Gets a Pennant Breakout (XLB, RTM)
  • Residential REIT ETF Breaks Out of Bull Flag (REZ)
  • Cybersecurity versus Software and Mobile Payment ETFs (CIBR, IPAY, IGV)
  • Insurance and REIT ETFs Form Bullish Patterns (KIE, REZ, IYR)
  • Aerospace & Defense ETFs Break Out of Flags (ITA, PPA)
  • Agribusiness and Metals & Mining ETFs Follow their Commodities (MOO, XME)
  • Uranium ETF Pulls back within Uptrend (URA)
  • Global Timber Forestry ETF Gets a Flag Breakout (WOOD)
  • Strategic Metals ETF Stabilizes in Reversal Zone (REMX)
  • Palladium ETF Consolidates after Breakout (PALL)
  • DB Base Metals ETF Forms Bullish Pattern (DBB – plus CPER, COPX)
  • DB Agriculture and Related ETFs in Uptrends (DBA, CANE, WEAT)
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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