Market/ETF Video – Downside Participation Broadens, Industrial Commodities Hit, Oil and Ag Remain Strong (Premium)

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Market/ETF Review and Outlook Video

The weight of the evidence remains bearish for stocks and participation to the downside expanded significantly over the last six trading days. Even the low volatility leaders were hit hard and there were few places to hide as correlations rose among stocks. Bonds managed to firm, but do not offer an alternative to stocks because they are in downtrends. Yield spreads continue to widen and show increasing stress in the credit markets. Looking at the ETFs, energy and agricultural related ETFs held up the best and remain in long-term uptrends. Industrial metals related ETFs were hit, but palladium and uranium held firm. Gold is also within a bullish continuation pattern, but silver acted more like an industrial metal and got hit hard.

       Broad Market Notes

  • Composite Breadth Model Remains Bearish
  • Measuring Risk with the 5/200 Cross for S&P 500
  • Percentage of Stocks above their 200-day SMA Plummets
  • Three -80% Days in All Four Indexes
  • Low Volatility Hit Along with High Beta (SPLV, SPHB)
  • SPY and QQQ Head for Lower End of Falling Channels
  • IJR Leads on the Downside with New Low
  • Bonds Firm, but Still Not a Viable Alternative
  • GLD Reverses Downswing within Bigger Correction
  • Dollar Benefits as the Risk Off Currency
  • Yield Spreads Continue to Widen and Show Stress
  • Fed Balance Sheet Contracts a Small Amount

      ETF Trends, Patterns and Setups:

  • A Plethora of New Downtrend Signals
  • Energy-Related ETFs Hold Up Relatively Well (WTI, XLE, XES)
  • DB Agriculture, Wheat, Sugar and Coffee ETFs Maintain Uptrends 
  • Aerospace & Defense ETFs Fall with Stock Market (ITA, PPA)
  • Metals & Mining SPDR Pulls back after New High (XME)
  • Gold Miners ETF Returns to the Breakout Zone (GDX)
  • Copper and Base Metals ETFs Pull Back Hard (CPER, COPX, DBB)
  • Palladium ETF Bounces off Breakout Zone (PALL)
  • Uranium ETF Tests Break Out Zone (URA)
  • Agribusiness ETF Retraces Half of Breakout Move (MOO)
  • XLK, XLY, XLF, XLI and XLC in Downtrends for 2022
  • XLV, XLP, PBJ, XLU and XLB in Uptrends, but Still Vulnerable (IFRA too)
  • Cybersecurity ETF Succumbs to Selling Pressure (CIBR)
  • Cloud, Internet, Semis and Software Hit New Lows
  • Banks Extend Declines and Insurance Get Hits
  • Healthcare Providers ETF Gets Another Big Swing (IHF)
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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