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Large-caps finally pulled back with the S&P 500 SPDR falling around 5% in September. Small-caps held up better with a smaller decline. Overall, there was a rotation underway in September as money moved into banks, energy, airlines and defense. Money moved out of the high-beta ETFs (tech, ARKs), rate sensitive groups (REITs, Utes, Telecom) and the former leaders (XLV, IHI, PHO). A 5% decline is not really a correction. It is more of a pullback and this pullback could evolve into a correction, which means a multi-week decline or consolidation. The Composite Breadth Model remains bullish and yield spreads are low, but the Fed balance sheet contracted and Treasury yields broke out. This could be causing a rethink within the market and prices are adjusting accordingly.
Trading Corrections: [2] Identifying and trading the falling wedge.
Exit Strategies: [3] Indicators, riding the trend, using the ATR Trailing Stop.
Broad Market Notes
- Composite Breadth Model Remains Bullish
- Yield Spreads Remain Narrow Overall
- Fed Balance Sheet Contracts by Most Since July 2020
- SPY Ends its Streak
- Zweig Breadth Thrust in No Man’s Land
- Looking for Follow through Breadth Pop
- TLT Breaks Down
- GLD Becomes Oversold within Downtrend
- UUP Breaks out of Range
- Oil Extends on Channel Breakout
- SPY Pulls Back within Bigger Uptrend
- QQQ Barely Bounces
- Small-caps Holding Up Better than SPY and QQQ
ETF Highlights
- Ranking and Trend Table Overview
- Finance and Banks are Leading with Breakouts
- Energy ETFs Extend on Wedge Breakouts
- Prior Leaders ST Oversold within Uptrends (XLK, XLC, XLRE, XLV, IHI, PHO)
- Tech Related ETFs Become Oversold, but Lead lower in September
- SOXX Hits Channel Line and Becomes Oversold
- Mortgage Real Estate ETF Holds Breakout
- Airline ETF Breaks Out after Retracement
- Food & Beverage ETF and Agribusiness ETF Form Bullish Triangles
- Biotech ETF Hits Support Zone and Becomes Oversold
- Lithium ETF Consolidates within Strong Uptrend
- Strategic Metals ETF Forms Small Falling Wedge within Uptrend
- Uranium ETF Firms Near 50% Retracement
- Sports Betting iGaming ETF Forms Bull Flag after Big Surge
- EV ETFs Remain with Choppy Uptrends
Pet Care ETF Becomes Oversold for 3 Days
- Trending Lower Since May (Correction or Downtrend?)
- Industrials, Infrastructure, Transports, Defense and Infrastructure ETFs
- Home Construction and Retail ETFs
- Materials, Metals/Mining, Steel and Copper ETFs