Tuesday, November 01, 2016 11:10:12 AM
Two Steps Forward and One Step Backward BY ART HILL
There are basically two moves to focus on right now. First, the major index ETFs surged from the Brexit lows in late June and hit 52-week highs in July-August-September. This represents two steps forward. The second move is what happened after the 52-week highs. Some ETFs corrected, some traded flat and some hit new highs just last week (QQQ). This move represents one step backward. The table below shows the percentage distance from the recent peak for 10 major index ETFs. Small-caps and micro-caps are the furthest from their higher, while large-caps and large-techs are the closest. Small-caps corrected the hardest, but they also advanced the most during the prior surge.
Bottom Line: The bigger uptrend is the dominant force and I am using this to set my broad market bias. This means I am focused on bullish setups and bullish resolutions. Conversely, I am ignoring short-term support breaks, bearish MACD crosses, bearish candlestick patterns and the like.
There are basically two moves to focus on right now. First, the major index ETFs surged from the Brexit lows in late June and hit 52-week highs in July-August-September. This represents two steps forward. The second move is what happened after the 52-week highs. Some ETFs corrected, some traded flat and some hit new highs just last week (QQQ). This move represents one step backward. The table below shows the percentage distance from the recent peak for 10 major index ETFs. Small-caps and micro-caps are the furthest from their higher, while large-caps and large-techs are the closest. Small-caps corrected the hardest, but they also advanced the most during the prior surge.
Bottom Line: The bigger uptrend is the dominant force and I am using this to set my broad market bias. This means I am focused on bullish setups and bullish resolutions. Conversely, I am ignoring short-term support breaks, bearish MACD crosses, bearish candlestick patterns and the like.
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