Weekend Video – SPY Recovers after Gap, But Downtrends Expand, Bonds Throw Tantrum, Banks Surge (Premium)

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Stocks were hit hard on Monday-Tuesday with dozens of ETFs becoming oversold, including SPY. These oversold conditions gave way to a strong rebound the rest of the week with Finance and Energy leading the way. Bonds threw a small tantrum after the Fed meeting as the 20+ Yr Treasury Bond ETF fell over 3% and the 10-yr Treasury Yield broke its summer highs. This move benefited banks as the Regional Bank ETF gained over 3% on the week. Even though many ETFs recovered after Monday’s sharp decline, there were 18 new downtrend signals this week. There are still more stock-related ETFs in uptrends than downtrends, but there are still quite a few pockets of weakness with ETFs in downtrends since spring. These downtrends could be big corrections after huge advances and bigger breakouts would signal an end to these corrections.

Trading Corrections: Identifying and trading the falling wedge.

Exit Strategies: Indicators, riding the trend, using the ATR Trailing Stop.  

Broad Market Notes

  • SPX %Above SMA Indicators Pop
  • Market Regime Remains Bullish
  • Fed Balance Sheet Hits Another New High
  • Bond Spreads Remain Narrow and Flat
  • TLT Throws a Tantrum as 10-yr Yield Breaks Out
  • KRE Surges Along with 10-yr Yield
  • Dollar Challenges 2021 Highs
  • Gold Extends Downtrend
  • Oil Extends on Channel Breakout
  • SPY Fills the Gap
  • IWM Breaks Out within Range
  • QQQ Gets Oversold Bounce
  • QQQJ Breaks Out with Surge

ETF Highlights

  • A Dozen New Downtrends, but Way More Uptrends
  • 52-wk High Column Tells a Story
  • Its Like Monday Never Happened (XLF)
  • Trending Down Since May (XLI, IFRA, XLB, COPX, SLX, WOOD)
  • Leading Uptrends (SOXX, XLY, IHI)
  • Oversold Bounce within Uptrend (XLK, XLC, XLV)
  • Wedge Breakout after 33-50 Percent Retracement (XLE)
  • REITs and UTEs Fall along with TLT
  • Flag Breakouts within Uptrends (IGV, FDN, SKYY, CIBR, BETZ)
  • JETS Breaks Out after 50-67 Percent Retracement
  • Natural Gas ETF Extends on Wedge Breakout
  • DB Base Metals ETF Holds Triangle Breakout
  • DB Agriculture ETF Breaks Out after Oversold Condition
  • Water Resources ETF Gets Oversold Bounce within Steady Uptrend
  • StochClose Whipsaws: ARKG, ESPO, FAN
  • Moment of truth: TAN, QCLN, ARKK, ARKQ, ARKW, PRNT
  • EV ETFs Get Oversold Bounces within Choppy 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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