The Nasdaq 100, Transports And Russell 2000 ETFs Are In Bear Market Territory
I’ll present the weekly charts right this moment as all 5 fairness ETFs have detrimental weekly charts.
A detrimental weekly chart happens when an ETF is under its five-week modified transferring common with a declining studying in its 12x3x3 weekly sluggish stochastic.
The major motive I’ve been bearish since October started is the unwinding of the Federal Reserve stability sheet. As of Dec. 19, the Fed stability sheet was marked at $4.084 trillion, down $416 billion for the reason that finish of September 2017 when it was $4.5 trillion. The Fed is predicted to empty one other $46 billion in December. Then in 2019 and 2020, the Fed is predicted to empty $50 billion a month, a complete of one other $1.2 trillion.
Here’s Today’s Scorecard
SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)
Courtesy of MetaStock Xenith
The weekly chart for Diamonds stays detrimental with the ETF under its five-week modified transferring common at $244.59. The 12x3x3 weekly sluggish stochastic studying ended final week at 22.66, down from 30.77 on Dec. 7. The draw back danger is to the 200-day easy transferring common at $206.56, which I think about the “reversion to the mean”. The horizontal line goes again to the October 2007 excessive.
SPDR S&P 500 Trust ETF (NYSEARCA:SPY)
Courtesy of MetaStock Xenith
The weekly chart for the Spiders stays detrimental with the ETF under its five-week modified transferring common of $264.21. The 12x3x3 weekly sluggish stochastic studying fell to 20.55 final week, down from 27.89 on Dec. 14. The draw back danger is to the 200-day easy transferring common at $234.70, which I think about the “reversion to the mean”. The horizontal line goes again to the October 2007 excessive.
Invesco QQQ ETF (NASDAQ:QQQ)
Courtesy of MetaStock Xenith
The weekly chart for the QQQ ETF is now detrimental however oversold with the ETF under its five-week modified transferring common at $163.02. The 12x3x3 weekly sluggish stochastic studying declined to 19.94 final week, down from 25.06 on Dec. 1. The draw back danger is to the 200-day easy transferring common at $133.43, which I think about the “reversion to the mean”. The horizontal line goes again to the October 2007 excessive.
iShares Transportation Average ETF (NYSEARCA:IYT)
Courtesy of MetaStock Xenith
The weekly chart for the Transports ETF stays detrimental with the ETF under its five-week modified transferring common at $180.51 with its 12x3x3 weekly sluggish stochastic studying falling to 23.59 final week, down from 33.11 on Dec. 14. The transports ETF declined so violently that it is already under its 200-week easy transferring common or “reversion to the mean” at $163.85. The horizontal line goes again to the May 2008 excessive.
iShares Russell 2000 ETF (NYSEARCA:IWM)
Courtesy of MetaStock Xenith
The weekly chart for the Russell 2000 ETF stays detrimental however oversold with the ETF under its five-week modified transferring common of $145.64 with its 12x3x3 weekly sluggish stochastic studying declining to 12.31 final week, down from 17.58 on Dec. 14, falling additional under the oversold threshold of 20.00. The Russell 2000 has been the draw back chief and is now under its 200-week easy transferring common or “reversion to the mean” at $134.55. The horizontal line goes again to the July 2007 excessive.
When you have a look at these charts, the horizontal strains symbolize the highs earlier than the Crash of 2008. Consider strength above this line as being fueled by cash printing attributable to quantitative easing that inflated the Fed stability sheet to $4.5 trillion. The response to unwinding of the stability sheet is extra important. It’s all about Fed coverage creating asset bubbles repeatedly then popping them.
Disclosure: I/we now have no positions in any shares talked about, and no plans to provoke any positions inside the subsequent 72 hours. I wrote this text myself, and it expresses my very own opinions. I’m not receiving compensation for it (apart from from Seeking Alpha). I’ve no enterprise relationship with any firm whose stock is talked about on this article.
