Weekend Video – More Downtrends than Uptrends, Oversold with Excessive Bearish Sentiment, Commodity ETFs Lead (Premium)

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Next Week's Publishing Schedule

Tuesday, 1 February: Trend Composite Trends and Signals

Thursday, 3 February: Market/ETF Commentary

Saturday, 5 February: Weekend Video

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

January was a rough month for stocks so far as QQQ fell 11.6% and IWM fell 12.2%. SPY and the S&P 500 EW ETF (RSP) held up much better with declines of around 6%. Again, we are seeing more weakness in mid-caps, small-caps and Nasdaq 100 stocks than in the broad large-cap universe (SPY, RSP). The breadth indicators show far more stocks in long-term downtrends than uptrends and yields spreads are widening. Even though stocks are short-term oversold and ripe for a tactical bounce, there are more pockets of weakness than strength and the Market Regime is bearish. The commodity ETFs and KRBN continue to lead the market, as are the energy-related ETFs. Several ETFs are near support levels from their Sept-Oct lows and oversold, which could give way to a bounce. We end with long-term and extreme oversold conditions for the biotech ETFs, which means that perhaps the worst is over.

       Broad Market Notes

  • Composite Breadth Model Flips Bearish
  • %Above SMA Indicators Deteriorate Further
  • Bear Markets are Like a Box of Chocolates
  • AAA and BBB Spreads Remain Elevated
  • Fed Balance Sheet Contracts a Small Amount
  • Tactical Bounce after Oversold (AAII, Put/Call, VIX, RSI)
  • SPY Battles the 200-day SMA
  • QQQ Gets 90% Up Day for Advance-Decline Percent
  • Small and Mid-caps Forge Lower Lows from Monday to Friday
  • 20+ Yr Treasury Bond ETF Consolidates after Break Down
  • Gold is Anybody’s Guess
  • Dollar Hits New High

      ETF Trends, Patterns and Setups:

  • Downtrends Expand on Trend/Rank Table
  • Oil and Energy ETFs Continue to Lead (DBE, XLE, XOP, FCG, XES)
  • Global Carbon ETF Consolidates within Strong Uptrend (KRBN)
  • XLF Holds December Lows as Banks Hit Retracements (KRE, KBE)
  • Staples Related ETFs Hold Uptrends and Hit Retracements (XLP, PBJ)
  • Agriculture and Base Metals ETFs Hold Leading Uptrends (DBB, DBA)
  • REITs Hit Hard, but Utes Hold December Low (XLRE, REZ, XLU)
  • Healthcare SPDR and Healthcare Providers Hit October Lows (XLV, IHF)
  • Some very Choppy Uptrends/Ranges (XLI, IFRA, XLB, KIE, XME, MOO)
  • Home Construction ETF Hits October Low (ITB)
  • Copper Miners ETF Test Breakout as Copper Fails (COPX, CPER)
  • Lithium, Metals and Uranium Break Down (LIT, REMX, URA)
  • Electric Vehicle ETFs Break Down (CARZ, IDRV, DRIV)
  • XLK Closes at High of the Week
  • IPAY, IGV and FDN Hold above Monday Lows
  • Stink Bids for Biotechs? (IBB, XBI)
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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