Entering the second to last month of the 2021, and markets look to be relying on decent-to-good earnings to continue climbing higher.
Volume Y-O-Y has gone down a bit, which makes sense as investors are stuck trying to figure out where we go next, where concerns over debt, continued corporate earnings growth, inflation, energy & supply chains & sitting on edge.
The 3x levered S&P 500’s UPRO ETF (above) is at record highs, while their NASDAQ counterpart TQQQ has more volume, but similar price stall-out at just above all-time highs.
While everything is still climbing, the RSI’s & MACD on the two above ETFs show that perhaps there is about to be some risk-off movement, as both RSIs are flirting with overbought territory & the MACD’s are beginning to curve more.
Technology (VCLO), Oil (UCO), Uranium (URA) & Semiconductor (USD) ETFs Are Performing Stronger Than The Pack
Technology, specifically the disruptive names in cloud computing & cyber security are performing well, with the VCLO ETF (below).
This looks like a time for investors to time a decent entry, as prices are slowing down while their RSI readjusts, and volume is above average.
With the current state of the energy markets, it is no surprise that oil is bullish, although it looks like the UCO ETF is showing some signs of slowing down its rapid recent growth.
This looks like a time where investors may get a decent entry point as their RSI is coming back down from overbought levels, and prices are expected to continue climbing.
URA, an ETF that tracks uranium also looks to be cooling off, with its RSI approaching neutral again, with higher than average volume for the year, creating an opportunity for entry.
Their 50 Day Moving-Average should provide support on the price to continue near-term growth.
USD ETF also looks healthy over the last year, especially with their more recent performance since September.
With an near overbought RSI, there may be some pullback that investors can use as an entry-point in the near-term, to catch some of their momentum.
BioTech (LABU), Education (EDUT), China Real Estate (CHIR) & ESports/Digital Entertainment (NERD) Are Lagging The Pack
LABU, an ETF that has 3x leveraged exposure to BioTech has been performing poorly this past year, but looks to potentially be reversing course & be an opportunity in the near-term for some growth.
EDUT, a global education ETF has had a difficult year, however, it may be able to reverse course if it can maintain above $10.88 & break above $11.02, as with an RSI that is signaling being oversold, there should be opportunity to reverse course.
It is no surprise that Chinese Real Estate is in some trouble at the moment, and the CHIR ETF agrees.
I think that there may be more pain to come, as there are still many relevant uncertainties, but for investors looking for exposure in the space, they offer a 6.47% dividend yield while you wait/to provide a cushion should they continue to decline.
The NERD ETF tracks Esports & Digital Entertainment & has also been having a tough go at it this year.
However, if they can stay above $26.28, they may reverse course in the near-term,with the RSI & MACD showing some more slight losses quickly, but their Moving Averages show signs of reversing.
Tying It All Together
Overall, it will be interesting to watch how the next week’s earnings calls come out, especially after Amazon’s & Apple’s this past week.
Broader indexes look ready to cool off a little bit, with high RSI’s on the S&P & NASDAQ leveraged ETFs, which should make for some good entry points for investors & volatility for traders.
Investors may be taking some profits here before the end of the year, which would mean more cash on the sidelines, and a shift into safer value names with more dividend yields.
*** I DO NOT OWN SHARES OR OPTIONS RELATED TO ANY OF THE NAMES MENTIONED ABOVE AS OF WRITING THIS ARTICLE ***