Do you want to know which ETFs are hot and which ones are not? Then you need my High-Volume ETF Cutline report. It tells you how close or far each of the 311 ETFs I follow is from its long-term trend line (39-week SMA). These are the ETFs that trade more than $5 million a day, so they are not some obscure funds that nobody cares about.
The report is split into two parts: The winners that are above their trend line (%M/A), and the losers that are below it. The yellow line is the line of shame that separates them. You can see how many ETFs are in each group and how they have changed since the last report (178 vs. 182 current).
GOLD OUTPERFORMS MARKET, BITCOIN STRUGGLES BELOW $100K MARK
[Chart courtesy of MarketWatch.com]
Moving the market
This morning, bond yields surged, with the 10-year yield spiking to 4.52%. This increase pulled the major indexes deep into the red, with the S&P 500 barely breaking even for the first week of February.
Adding to the market’s woes, consumer sentiment fell to 67.8, significantly below the expected 71.3, while inflation expectations soared in February.
The highly anticipated jobs report revealed that only 143,000 jobs were added in January. However, traders found some positive news: the unemployment rate dropped from 4.1% to 4%, and job numbers for November and December were revised upward significantly. Additionally, average earnings for January were higher than expected, raising concerns about rising inflation.
Overall, traders interpreted the wage growth increase as a sign of a healthy labor market, which might lead the Federal Reserve to maintain its current interest rate policy, rather than lowering rates to please the markets. Despite some positive surprises, the market was primarily driven by the rebound in inflation.
This week was crucial for Mega-Cap tech earnings, but the results were disappointing overall, causing the sector to lose approximately $625 billion. However, Meta stood out by extending its winning streak to 15 days. The short squeeze that occurred earlier in the week lost momentum today, while AI stocks began to recover from last week’s “DeepSeek” scare, which had previously tanked the sector.
Bond yields fluctuated throughout the week, ultimately ending higher, while the dollar experienced a rollercoaster ride. Crude oil prices slipped back to pre-election lows after a recent rise. Bitcoin hovered around the $100,000 mark all week but closed below it.
Gold was the top performer, ending the session with another record high and closing out a strong week as it approaches the $3,000 level.
Year-to-date, gold has outperformed the overall market, as measured by the S&P 500, by more than 3.5 to 1.
ETF Data updated through Thursday, February 6, 2025
How to use this StatSheet:
Out of the 1,800+ ETFs out there, I only pick the ones that trade over $5 million per day (HV ETFs), so you don’t get stuck with a lemon that nobody wants to buy or sell.
Trend Tracking Indexes (TTIs)
These are the main indicators that tell you when to buy or sell Domestic and International ETFs (section 1 and 2). They do that by comparing their position to their long-term M/A (Moving Average). If they cross above, and stay there, it’s a green light to buy. If they fall below, and keep going, it’s a red light to sell. And to make sure you don’t lose your shirt if things go south, I also use a 12% trailing stop loss on all positions in these categories.
All other investment areas don’t have a TTI and should be traded based on the position of each ETF relative to its own trend line (%M/A). That’s why I call them “Selective Buy.” In other words, if an ETF goes above its own trend line, you can buy it. But don’t forget to use a trailing sell stop of 12%, or less if you’re feeling nervous.
If some of these words sound like Greek to you, please check out the Glossary of Terms and new subscriber information in section 9.
DOMESTIC EQUITY ETFs: BUY— since 11/21/2023
Click on chart to enlarge
This is our main compass, the Domestic Trend Tracking Index (TTI-green line in the above chart). It has broken above its long-term trend line (red) by +4.49% and is in “Buy” mode as posted.
The financial markets showed a mixed performance as major indexes struggled to find direction following two consecutive positive sessions.
Traders carefully evaluated the latest earnings reports, leading to a period of volatility and heightened anxiety. Despite bearish pressure, the S&P 500 and Nasdaq managed to close in positive territory, defying expectations set by the advance/decline ratio.
Concerns over tariffs, which dominated market sentiment earlier in the week, temporarily subsided. This shift in focus was largely attributed to President Trump’s decision to delay duties on Mexican and Canadian goods for 30 days, creating a more optimistic market atmosphere.
In other financial markets, bond yields saw a slight uptick, while gold prices experienced a rare dip. The dollar continued its downward trend for the fourth consecutive day. Oil markets remained under pressure, and Bitcoin extended its decline, falling below the $100,000 threshold.
As we approach the latter half of February, historically known for its weak market performance, traders cautiously monitoring the situation.
While seasonal trends suggest potential challenges ahead, the current positive positioning of our TTIs may provide some reassurance, if they remain on the bullish side of their respective trend lines.
Mixed quarterly results from Alphabet and chipmaker AMD (-6%) negatively impacted the S&P 500 and Nasdaq, causing both indices to dip below their respective unchanged lines.
However, by the end of the session, both managed to recover and close with moderate gains, marking a “dump and pump” kind of day.
Alphabet shares fell by 8% after reporting a miss in cloud revenue, as the company increased its spending on artificial intelligence. This raised concerns among traders that Alphabet might take longer than expected to achieve its AI objectives.
The competition to bring AI to the masses is fierce, with hundreds of billions being invested in these efforts. However, it remains uncertain who will emerge victorious in this race.
The trade deficit’s downside blowout contributed to the dollar’s continued slide, while gold surged towards the $3,000 mark, setting another record high.
This rise in gold prices is partly due to a shortage of freely available gold, with one precious metals dealer commenting on the market’s total dislocation and the scarcity of available stocks in both gold and silver.
Crude oil prices declined, and bond yields retreated, with the 10-year yield dropping below the initial spike seen after Trump’s election.
Confusion reigns in the commodities market, particularly when observing the divergence between copper prices and bond yields, as noted by ZH.
Following yesterday’s pullback, the major indexes regained some stability and edged higher after the market opened. The Nasdaq led the rebound, while the Dow lagged, but all three indexes managed to close in the green.
China’s latest tariff response included imposing 15% duties on U.S. imports of coal and liquefied natural gas, and 10% on crude oil, farm equipment, and selected cars, effective February 10.
In recent negotiations, the U.S. agreed to pause tariffs on Mexico and Canada, as both countries committed to taking firm action to curb the massive inflow of drugs and immigrants.
On the economic front, job openings unexpectedly plummeted by more than 550,000, a stark contrast to last month’s surge of 273,000. Factory orders also declined overall in 2025, but neither development seemed to impact the direction of equities.
Records were broken today, with gold reaching a new all-time high and Meta achieving its 12th consecutive day of gains, setting a record streak.
The mega-cap sector surged at the opening but flattened out towards the end of the session. This upward momentum was bolstered by the most shorted stocks continuing their upward trajectory from yesterday.
As Trump’s Bitcoin reserve idea is being evaluated, traders are eagerly awaiting the outcome. If the evaluation is positive, we could see Bitcoin follow gold’s lead and surge into record territory.
