Weekend Video – SPY Pulls back as %Above 200-day Dips, Fed Balance Sheet Surges, IWM Flags and Four ETFs Setting Up (Premium)

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The market regime remains bullish, but breadth continues to wane and more breakouts are failing. Overall, ETFs related to tech, healthcare, communication services and REITs are leading, while ETFs related to industrials, materials and housing are lagging because their breakouts failed to hold. I am also watching TLT and the Dollar because they are typically risk-off assets and strength in these two could be negative for risk assets, like stocks. SPY and QQQ are mildly oversold after two week declines and IWM has a bull flag working. Within the ETFs, I am seeing some potentially bullish setups in the Clean Energy ETF (PBW), Biotech SPDR (XBI), Baltic Dry Freight ETF (BDRY) and Healthcare Providers ETF (IHF). See video for details.

Seasonal Patterns: Monthly and Best/Worst 6 Months (article/video)

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
  • %Above 200-day Hits Lowest Level Since early Nov
  • More Breakouts Failing (XLI, IFRA, XLB, ITB)
  • Fed Balance Sheet Surges to New High
  • Yield Spreads Show No Signs of Stress in Credit Markets
  • SPY and QQQ Become Oversold within Uptrends
  • Small-caps Hold Up better than Large-caps. but…
  • IWM Forms Bull Flag with Trading Range
  • Nasdaq 100 Next Gen ETF (QQQJ) Tests 50-day with RSI Mildly Oversold
  • TLT Toys with a Breakout
  • Gold Sinks as Dollar Surges off Support
  • Oil Breaks Out of Channel

ETF Highlights

  • ETF Table and Baltic Dry Freight ETF
  • XLK, XLC, XLV and XLRE Become Oversold within Uptrends
  • Finance SPDR Tests Breakout Zone
  • Industrials, Infrastructure and Materials Fail to Hold Breakout Zones
  • 5G and Software Hit Channel Lines and Become Oversold
  • SOXX, SKYY, FDN, CIBR and FINX in Uptrends, but No Setups
  • ITB Fails to Hold Breakout Zone, but XHB Does
  • Do or Die for Uptrend in Bank SPDR (KBE)
  • Clean Energy ETF (PBW) in Downtrend, but Perking UP
  • Clean Edge Green Energy ETF (QCLN) Maintains Triangle after Uptrend Signal
  • Solar Energy ETF (TAN) Goes for Flag Breakout
  • Biotech ETF (IBB) Gets Bounce after Becoming Mildly Oversold
  • Biotech SPDR (XBI) Shows Signs of Life
  • Healthcare Providers ETF (IHF) Bounces after Becoming Mildly Oversold
  • DB Base Metals ETF (DBB) Breaks Out of Triangle
  • Steel ETFs Break Down
  • Agriculture and Water ETFs Become Oversold within Uptrends
  • Agribusiness ETF (MOO) Falls Back into Triangle
  • Global Timber ETF (CUT) Fails to Hold Breakout
  • ARK ETFs Bounce after Becoming Oversold (RSI)
  • Space ETF (UFO) Flies Back to Breakout Zone
  • Electric Vehicle ETFs Take a Dip within Uptrends
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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