Weekend Video and Chartbook – RSI Streak Ends, Turn of the Month Performance, Short-term Oversold, Medium-term Correction

Today’s video covers last week’s big declines and what it means going forward, both short-term and long-term. Short-term, oversold conditions and the turn of the month strategy argue for a bounce. Looking out a month or more, outsized declines and bearish breadth thrusts argue for a correction. We will look at correction targets for SPY and what this might entail for the higher-beta IWM. The decline in stocks provided an opening for Treasury bonds, but TLT did not seize the moment and traded flat. The Inflation-Protected Bond ETF (TIP), on the other hand hit a new high. Gold did not seize the moment either and remains in a downtrend. Silver, on the other hand, outshone gold with a big bounce. Elsewhere in ETF land, healthcare-related ETFs held up relatively well, XLF and XME are oversold and at support, the breakout in ITB remains valid and the energy-related ETFs are flying the flag.

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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