The next report will be on Tuesday, July 1st
Vacation Notice
Note that I will be taking some time off in early July for a family vacation (July 7th to 18th). There will be no written reports or videos during this period. I will, however, update the Broad Breadth Model, Signal Pages and Ranking tables (Saturdays). I will also issue an alert if there is a major change between updates.
Report Headlines
- IEF Breaks Out of Triangle
- GLD Dips below Flag Breakout
- SLV Holds Breakout
- GDX and SIL Consolidate after New Highs
- Palladium ETF Pulls Back after Breakout
- Platinum ETF Extends Even Further
- CPER Remains in Choppy Uptrend
- DB Base Metals ETF Gets Pennant Breakout
- Agriculture ETFs Becomes Oversold
- Natural Gas ETF Falls Back to Support
- LIT Surges, Consolidates and Breaks Out
- Bitcoin Forms Bull Flag
ETF Momentum Ranking
The image below comes from the ETF Rotation Investor ranking table [1], which is updated every Saturday. Hence, the last close is Friday, June 20th. ETFs related to commodities, bonds and crypto continue to feature prominently in the top twenty. In fact, 10 of the top 20 are related to these three groups. In a bull market, we typically see 15 or more equity ETFs in the top 20. This is because bull markets lift most equity-related boats. The table below highlights ten ETFs related to commodities, bonds and crypto (pink shading). Strength in these alternatives means traders should also look outside of traditional equity ETFs.
As the table above shows, the Gold SPDR (GLD) is the top performer and five of the top performers are related to precious metals (GLD, SIL, PLTM, SLV, GDX). The two crypto related ETFs are Bitcoin ETF (IBIT) in the number three spot and the Transformational Data Sharing ETF (BLOK). In addition, we are seeing leadership from the 0-5yr TIPS Bond ETF (STIP), Uranium ETF (URA) and DB Agriculture ETF (DBA). However, the latter is likely to fall out of the top twenty at the end of this week.
IEF Breaks Out of Triangle
The outlook for Treasury yields is changing as the 10-yr Treasury Yield ($UST10Y) breaks down and the 7-10Yr TBond ETF (IEF) breaks out. Note that I covered $UST10Y in Wednesday’s market regime update. On the chart below, IEF surged in the first quarter with breakouts in February. Trading turned chaotic in April, but then settled down as the range contracted into June. IEF broke triangle resistance with an advance the last two weeks. I view this as bullish with an upside target in the 99-100 area. A close below 93 would argue for a re-evaluation.
The next chart shows the 0-30Yr TIPS Bond ETF (TIP), which is inflation-protected. TIP is in a long-term uptrend with new highs in September and April. TIP fell back after the early April high, consolidated into late June and broke out with a surge the last two weeks. This breakout argues for a continuation of the bigger uptrend. I will mark re-evaluation support at 108.
GLD Dips below Flag Breakout
I am returning to the daily bar chart for GLD because the Heiken Ashi candlesticks affect the RSI and %B values. The discrepancy is not big, but I prefer my indicators to be based on daily closing values. GLD remains in a leading uptrend with a new high in April and price well above the rising 200-day SMA. Short-term, the ETF corrected with a falling flag and broke out in mid June. Even though GLD fell back below the flag line, I do not consider this a negative development. Instead, this is just short-term noise. Should price dip further (<300), RSI and %B would likely near oversold levels and provide the next mean-reversion setup.
SLV Holds Breakout
The Silver ETF (SLV) remains in a long-term uptrend with a new high in June and price well above the rising 200-day SMA. The most recent signals were the pennant breakout on May 21st and the triangle breakout on June 3rd. Broken resistance in the 31 area turns first support should SLV pullback. RSI and %B are not near oversold levels and I do not see a setup on this chart right now. SLV is simply in the trend-monitoring phase, which means I am watching and waiting for the next setup.
GDX and SIL Consolidate after New Highs
The Gold Miners ETF (GDX) remains in a leading uptrend with a new high in mid June and price well above the rising 200-day SMA. The last oversold setup was near 46 when GDX hit the 61.8% retracement and %B was oversold. The last chart signal was the flag breakout on May 23rd. GDX extended to 54 on June 3rd and then moved sideways the last few weeks. This could be a small flag (blue shading). Other than that, I do not see a setup or oversold condition right now. GDX is in the trend-monitoring phase.
The Silver Miners ETF (SIL) is also in the trend-monitoring phase. SIL broke flag resistance on May 28th and surged towards 50 in early June. The ETF became short-term overbought near 50 and worked off this condition with some sideways price action the last two weeks. Perhaps a small falling flag is taking shape and a breakout at 49 would be bullish.
Palladium ETF Pulls Back after Breakout
The Palladium ETF (PALL) moved into a long-term uptrend with a breakout in late May and a PPO(5,200,0) cross above +1%. I removed the PPO from the chart to focus on the short-term oversold conditions in the future. The idea is to wait for tradable pullbacks using pattern analysis, RSI and %B. Short-term, the ETF surged in early June and then consolidated the last two weeks with a small pennant. A breakout at 99 would signal a continuation higher. Barring a pennant breakout, the breakout zone in the 90 area turns first support to watch should we get a pullback. I would then watch for RSI and %B to near oversold levels.
Platinum ETF Extends Even Further
The Platinum ETF (PLTM) extended even further and hit another new high this week. This unsustainable advance looks even more unsustainable, but PLTM is not backing down. There are some serious money flows into this gold substitute. I do not see a setup on this chart. Just a runaway train. Normally, a parabolic move like this is dangerous. At the very least, volatility is above average and don’t forget that volatility cuts both ways. There is nothing to do here except watch for tradable pullbacks and short-term oversold conditions.
CPER Remains in Choppy Uptrend
The Copper ETF (CPER) remains in long-term and short-term uptrends. Long-term, CPER is above the rising 200-day SMA with a string of higher lows since early 2024 and a 52-week high in late March. Short-term, CPER surged in the second half of April and worked its way higher in May-June. And I do mean “worked”. Trading has been choppy since late April, but the short-term trajectory remains up (blue shading). Key support is set at 28.
DB Base Metals ETF Gets Pennant Breakout
The DB Base Metals ETF (DBB) is equal parts copper, aluminum and zinc. Overall, the ETF remains within a downtrend since the second half of 2024 with a large falling wedge taking shape (blue dashed lines). Short-term, DBB surged from early April to mid May and broke short-term resistance. The ETF then consolidated with a pennant and broke out with a surge the last six days. DBB also closed above the 200-day SMA. Given strength in copper, gold, silver, palladium and platinum, I have a bullish bias on metals and DBB. Re-evaluation support is set at 18.25
LIT Surges, Consolidates and Breaks Out
The Lithium & Battery Tech ETF (LIT) is largely a play on China with 43.5% exposure to China [2]. 20% of components are US-based with the largest being Albemarle (7.8%) and Tesla (5%). LIT is clearly in a long-term downtrend the last two years with a new low in April. There were two false starts in 2024 when the ETF surged and consolidated. Subsequent breakout attempts failed. Another surge, consolidation and breakout sequence is underway. LIT surged from 32 to 40 in April-May, consolidated into June and broke out at 38. This breakout is bullish with re-evaluation support marked at 36. Note that LIT has above average volatility (risk).
Natural Gas ETF Falls Back to Support
The Natural Gas ETF (UNG) broke resistance at 17.5 with a surge last week, but immediately erased this surge with a decline back below 16 this week. Even though the breakout did not hold, UNG remains in a support zone (blue shading). Support here stems from broken resistance and the April-May lows. UNG held 15 from April to June and this level is the line in the sand. Despite a failed breakout, support is at hand and I would not turn bearish until a break below 15.
Agriculture ETF Becomes Oversold
The DB Agriculture ETF (DBA) fell sharply the last three weeks and closed below the 200-day SMA for the first time since January 2024. DBA broke wedge resistance in April and the June decline negated this breakout with the close below 26.50. Despite the close below the 200-day SMA, DBA is near a support zone (blue shading), RSI is oversold (<30) and %B dipped below 0. The pattern breakout failed, but a new setup is emerging with DBA oversold and near support.
Bitcoin Forms Bull Flag
The Bitcoin ETF (IBIT) remains in a long-term uptrend since the wedge breakout in late April. IBIT extended to a new high in late May and then corrected into June with a falling flag. These are short-term continuation patterns that take their trading bias from the direction of the prior move, which was up. The swing within the flag turned up with bounce the last two days. Further strength above 62 would trigger a flag breakout and signal a continuation higher. I would then mark re-evaluation support at 57.
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