- Moving the markets
The major indexes were subdued early in the session, because Target’s profit warning sent equities into the red. After some bobbing and weaving, momentum turned positive, as dip buyers and a short squeeze combined forces to produce a green close to.
A big assist came from the bond market, after yields retreated with the 10-year losing 5.6 basis points and closing a tad below the much-feared 3% level. Any close above it appears to wreak havoc with equities, while any close below it supports bullish sentiment.
Traders are still anxiously debating whether the recent bounce is a bear market rally, or if we have seen the bottom of this year’s sell-off with a new bullish run now on deck. Personally, I think we may see a little more push to the upside, yet in limited fashion, after which new lows for the year will be made.
Econ data painted a different reality picture then that of equities. First, as ZH reported, the World Bank downgraded global economic growth and warned of stagflationary pressures building.
This was followed by the Atlanta Fed downgrading US economic growth to 0.9% from a 1.3% level just seven days ago. Way to go! Quipped ZeroHedge: Finally, today was a great day for buying stocks…
2. ETFs in the Spotlight
In case you missed the announcement and description of this section, you can read it here again.
It features some of the 10 broadly diversified domestic and sector ETFs from my HighVolume list as posted every Saturday. Furthermore, they are screened for the lowest MaxDD% number meaning they have been showing better resistance to temporary sell offs than all others over the past year.
The below table simply demonstrates the magnitude with which these ETFs are fluctuating above or below their respective individual trend lines (%+/-M/A). A break below, represented by a negative number, shows weakness, while a break above, represented by a positive percentage, shows strength.
For hundreds of ETF choices, be sure to reference Thursday’s StatSheet.
For this closed-out domestic “Buy” cycle (2/24/2022), here’s how some of our candidates have fared:
Click image to enlarge.
Again, the %+/-M/A column above shows the position of the various ETFs in relation to their respective long-term trend lines, while the trailing sell stops are being tracked in the “Off High” column. The “Action” column will signal a “Sell” once the -12% point has been taken out in the “Off High” column, which has replaced the prior -8% to -10% limits.
3. Trend Tracking Indexes (TTIs)
Our TTIs headed south and inched closer towards their respective trend lines.
This is how we closed 06/07/2022:
Domestic TTI: -2.65% below its M/A (prior close -3.57%)—Sell signal effective 02/24/2022.
International TTI: -3.07% below its M/A (prior close -3.50%)—Sell signal effective 03/08/2022.
Disclosure: I am obliged to inform you that I, as well as my advisory clients, own some of the ETFs listed in the above table. Furthermore, they do not represent a specific investment recommendation for you, they merely show which ETFs from the universe I track are falling within the specified guidelines.
All linked charts above are courtesy of Bloomberg via ZeroHedge.
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