This week looks set to explain itself just by looking at the charts for the S&P 500 & the NASDAQ.
TQQQ’s punch bowl looks to have been emptied & the lights turned off, UPRO is doing a bit better, but still showing a lot of weakness.
TQQQ closed beneath its 200 Day Moving Average today (1/18/22), meanwhile they’re finishing the last of the drinks in the fridge at UPRO’s place, as MACD’s & RSI’s are showing the party is over (at least temporarily).
Adding Earnings Calls on top of all of the other recent news highlights is going to ensure an interesting couple of weeks, as we creep closer to rate hikes in the US.
Commodities (GSG), Energy (JHME), Mexico (MEXX) & India (INDL) Are All Leading The Pack
It’s no surprise to anyone that commodities are in demand.
GSG ETF tracks futures contracts on a wide range of commodities & has performed strongly over the last year.
As their RSI approaches 50 it will be interesting to check in with their MACD trend, as volumes haven’t been high in their recent decline.
JHME, the John Hancock Multifactor Energy ETF has also performed strongly this past year.
I expect some near-term pullback, as their RSI settles down from being so overbought.
MEXX, the Direxion Daily MSCI Mexico Bull 3X Shares ETF has also been having a great performance this year.
However, judging by their recent bearish MACD crossover & 50:200 Day Moving Averages there looks to be a nearing decline in prices, which could prove a buying opportunity for those looking to establish a position.
INDL, the Direxion Daily MSCI India Bull 2X Shares ETF has also had a strong year.
This is another one to watch, as their MACD & Price:10 Day MA are showing that there may be more near-term pain to come.
Small Cap Utilities (PSCU), Global Water Index (CGW), Aerospace & Defense (XAR) & Homebuilders (XHB) All Lagging The Pack
PSCU, the Invesco S&P Small Cap Utilities ETF has been underperforming over the last year.
There looks to be more pain to come, but depending on its holdings there may be an entry-opportunity on the horizon, as there is a ~3% annual cushion in the dividend yield.
I would be keeping an eye on their MACD & volume levels before beginning to make any type of move though, based on their moving averages:price & RSI.
CGW, the Invesco S&P Global Water Index ETF is another that has had a difficult time recently.
Another one in free-fall that may be worth looking at an entry to eventually if it fits your portfolio strategy.
There is less cushion though, as their dividend yield is only 1.74%.
XAR, the SPDR S&P Aerospace & Defense ETF has also been having a difficult year.
This looks to have more pain in the near-future, with the MACD about to bearishly cross, bringing the 10 Day MA below the 50.
XHB, the SPDR S&P Homebuilders ETF has had a tough 2022.
They’re looking at dipping into oversold RSI territory if they can’t establish a range above the 200 Day Moving Average.
Tying It All Together
Market participants are all still trying to figure out how to make sense of the current headlines.
Add in the adjustment in interest rates & how that will adversely impact “year ahead earnings” investment styles that many folks did during the tougher COVID months & it muddles the question even more.
While there do look to be discounts for starting new positions on the horizons, it’s tough to tell when the best moment is, but using these ETFs as barometers certainly helps.
Of course, look at each ETF’s holdings before making any full on judgements about them & their related sectors.
*** I DO NOT OWN SHARES OR OPTIONS CONTRACTS FOR OF ANY OF THE NAMES LISTED ABOVE ***