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Stocks surged on Thursday with SPY and QQQ gapping higher in an attempt to end their pullbacks. The gaps-surges are largely holding, but breadth was lackluster and techs fell back on Friday. Rising Treasury yields are influencing current market dynamics. This creates a headwind for tech, high-growth and interest rate sensitive groups (Utes, REITs, Telecom, Housing). Banks and insurance stocks are reacting positively and leading the market. Elsewhere, energy-related ETFs are leading, as are the DB Agriculture ETF and DB Base Metals ETF (DBB). There are several ETFs in downtrends since May, but these could be extended corrections after huge advances. Moreover, some are making short-term breakout attempts within these bigger downtrends.
Trading Corrections: Identifying and trading the falling wedge.
Exit Strategies: 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 Expands
- QQQ Gaps and Falls Back
- Small-caps Remain Stuck in a Rut
- Breadth Indicators Fall Short of Thrust
- TLT Extends Downtrend as 10-yr Yield Exceeds 1.6%
- GLD Pops and Drops
- UUP Breaks out of Range
- Oil Extends on Channel Breakout
ETF Trends, Patterns and Setups:
- Ranking and Trend Table Overview
- Finance and Banks Continue to Lead as Rates Rise (XLF, KRE, KIE)
- Energy ETFs Lead with New Highs (XLE, FCG, XOP)
- Metals and Ag ETFs Lead with Breakouts
- Lithium and Rare Metals ETFs Fall Short of Breakouts (LIT, REMX)
- QQQ, XLK and XLC Gap Up and Stall
- Rate Sensitive ETFs Under Pressure (XLU, XLRE, REZ, IYZ)
- ITB Remains in Downtrend since May
- Tech ETFs Hold the Gap for Now (SKYY, CIBR, IGV, FINX, FDN, SOXX)
- 125-day vs 255-day Range (XRT)
- Defense-Aerospace ETFs Go for a Breakout (ITA, XAR)
- JETS Holds Breakout as IYT Goes for Breakout
- IBB is Victim of Own Success (MRNA)
- Electric Vehicle ETFs Still Correcting
- No Short-term Breakout within Downtrend: XLI, XLB, SLX
- Breakouts within Downtrends: COPX, IFRA