There were two short-term downgrades for equity trends: QQQQ and IWM. These indexes have been leading the broad equity markets on the upside and could very well do the same in downward market correction. While equities have breached the resistance levels near late 2008, they have have yet to do so in a decisive manner, i.e. considerable price performance exceeding resistance levels and confirmation with expanding volume.
In terms of price-volume analysis, 46% of stocks traded down on expanding volume to reflect some signs of capitulation. However, closely tracking this were 40% of stocks trading down on contracting volume, which is the most bearish of relationships and is usually a bellwether for more bearish selling.
ETF Sectors and Key Industries: Short-term trend downgrades (XLE, XLK, IYZ, OIH, PPH, SMH); and Intermediate-term trend downgrades (IYZ).
ETF International Equity Indexes: New 5 Day Lows (IFN); Short-term trend downgrades (EWC, EWG, RSX, FXI, EEM, GUR, GMF, GAF, EWX); Intermediate-term downtrends (IFN, EWJ). If anyone truly understands the painful reality for American consumers, it is China and the last 3 weeks of market performance for the FXI indicate such. Investors’ appetite for risks has led to indigestion and asset allocation revisions are standard prescriptions for relief.
ETF Commodities: Short-term trend downgrades (USO, UGA, DBA, DBC); and Intermediate-trend downgrades (DBA).
ETF Forex: Short-term trend downgrades (FXC, FXA, BZF); Short-term trend upgrades (XRU, FXY); and Intermediate-trend upgrades (ICN, CEW). I realize that there has been a lot of talk about the dollar’s weakness, but I regard this as more of a secular trend. One cannot argue with the tape and for now, the dollar appears to be successfully maintaining the support of its December 2008 lows.
ETF Bonds: Short-term trend upgrades (IEF, AGG, EMB). There has been a lot of reactive volatility in the treasury market lately due to a contradicting series of positive and negative economic data reports and treasury auctions. Meanwhile, the performance of corporate and emerging market bonds have been demonstrating relative strength and may point to some light at the end of the tunnel.
