Today’s video starts with the S&P 500 and the reversal seen over the last few weeks. We look at the spinning top, the outside week, downside follow through and the ROC shock. With a reversal in play, I put forth a correction target for the S&P 500 SPDR and this serves as the base case for the broader stock market (a correction within a bigger uptrend).
The breadth models are still bullish overall, but some of the indicators did not come close to their January-February levels as fewer stocks participated in this advance. In addition, some breadth indicators dipped to their lowest levels since March-April and this shows the strongest selling pressure since the advance began.
Attention then turns to the ETF ChartBook, which is organized top-down (major index ETFs, sector SPDRs, industry group ETFs…). Small-caps held up quite well this week, but are still long-term and medium-term laggards. XLB and XLI take top honors for the sector SPDRs. The tech-related ETFs are in the midst of a long overdue corrective period. There were channel/flag breakouts in IBB, XBI, XME and REMX. The precious metals related ETFs remain stuck in consolidations, which are view as bullish continuation patterns. Bond ETFs and bond proxies are just plain stuck.
There are two ETFs to watch this coming week. The Healthcare SPDR (XLV) held up well and remains above its big breakout zone. The Healthcare Providers ETF (IHF) returned to its triangle breakout and 200-day and firmed as RSI dipped into the 40-50 zone.