This past week was unsurprisingly volatile in the markets, with both the S&P 500 & the NASDAQ indexes gapping down on Friday after the CPI disappointment.
Jobless claims also did not help the picture, with a disappointing report, and consumer credit also increased again.
QLD, the ProShares Ultra QQQ ETF dropped 7.12% on Friday (2x levered), as fears about inflation, interest rates & the state of the US consumer & employee made investors seek less risk.
Their trading volume is still below average for 2022, although on Friday they received more trading attention than they had for the last few weeks.
The $43.66 price-level will have to try & hold up, else they will fall down to test $41.96.
SPY, the SPDR S&P 500 ETF also had a difficult week, closing Friday on a -2.9% gap down.
Both indexes shown above have RSI’s that are bordering on being oversold, but SPY’s MACD will bearishly cross before QLD’s.
SPY will try to stay above $385.15, else it will continue to fall until it tests the $380.54 level.
Let’s look at some of the top & performing ETFs based on sectors & geo-locations.
Oil Services (OIH), Corn (CORN), North American Pipelines (TPYP) & US Dollar (UUP) Are All Bullishly Leading The Markets
OIH, the VanEck Vectors Oil Services ETF has been steadily gaining since early December 2021, although it had a difficult last 3 trading sessions.
With an MACD that looks about to bearishly cross & a neutral RSI, there looks to be more losses in store for OIH in the near-term.
Traders can capitalize on this by using their options, where profit from puts can be put to use to buy more shares as the price falls lower, and the investor collects a dividend.
CORN, the Teucrium Corn Fund ETF has also been climbing steadily since October 2021, as fears about food shortages & supply chains have continued.
CORN’s MACD is bullishly crossing, signaling that there may be momentum in the coming days, and their RSI is neutral.
They will need to break above their 50 day moving average, before testing the $30.04 level.
TPYP, the Tortoise North American Pipeline Fund ETF has also enjoyed strong returns since September 2021.
TPYP ETF’s MACD is bearishly crossing over, and their RSI is neutral, so there may be some short-term weakness coming.
Unfortunately, they do not have options, but their 3.37% dividend yield can form an appealing price cushion for losses if an investor holds the ETF for a year.
UUP, the Invesco DB US Dollar Index Bullish Fund ETF has been steadily climbing over the last year, although it did decline a little bit in May 2022.
UUP has recently completed a bullish MACD crossover, and its RSI is approaching overbought after Friday’s 0.8% gap up.
They do not offer a dividend, but they do have options that traders can use to profit & hedge against volatility as they march onward to test the $28.07 level.
Cannabis (TOKE), Industrials (UXI), Dynamic Media (PBS) & Clean Energy (PBW) Bearishly Lagging The Markets
TOKE, the Cambria Cannabis ETF has had a disappointing past year (I have a position in TOKE), and they appear to be facing additional near-term losses.
They broke through their $8.70 support level, and their MACD is bearishly crossing over, signaling that they are going to continue lower in the coming days.
They do not have options, but do offer a 4.05% dividend yield that can serve as a cushion for investors who hold the ETF for a year.
UXI, the ProShares Ultra Industrials ETF
PBS, the Invesco Dynamic Media ETF has also had a difficult past year, particularly since December 2021.
Their MACD is about to bearishly cross over, despite their RSI almost being in oversold territory signaling that this name is not out of the woods yet & should see more near-term price declines.
PBW, the Invesco WilderHill Clean Energy ETF has had a choppy year, losing 46.5% of its value since it peaked in November 2022.
PBW also has a bearish crossover approaching on its MACD, and a neutral RSI.
If they fall below the $49.79 level, they should test the $48.89 support line after.
PBW pays a 2.64% dividend yield, and also has options, making this a name that can be turned into profits, even during market downturns.
Tying It All Together – The Week Ahead
Next week looks to be a continuation of late last week, unless there are some surprises in store for the data being reported.
NY Fed Inflation expectations will be reported on Monday, followed by the NFIB Small Business Index & PPI Final Demand numbers on Tuesday.
Based on the other numbers that we are seeing reported, these look to also be disappointing for markets.
Retail Sales, the Empire State Manufacturing Index & the NAHB Homebuilders Index numbers will all be released on Wednesday, along with the FOMC statement & projections in the afternoon.
Thursday will have unemployment numbers, along with housing starts & building permits, and the Philadelphia Fed Manufacturing Index.
Friday closes the week off with Industrial Production Index, Capacity Utilization & Leading Economic Indicators numbers being reported.
Pending any surprises, Friday’s move down should continue into next week, as market participants try to establish what the market’s fair value is.
*** I DO NOT OWN SHARES OF QLD, SPY, OIH, CORN, TPYP, UUP, UXI, PBS or PBW ETFs ***
*** I OWN A POSITION IN TOKE ***