ETF Trends: Weak Rebound in Equities

ETF U.S. Equity Indexes: Tuesday saw equities rebound and recoup approximately half of Monday’s losses on what? If the answer is weaker volume, then you are correct.

Driving Tuesday’s advance were positive earnings surprises from sectors in retail (HD, TGT, TJX), financials (FMD), and energy (SOLF). Making matters worse or better, depending upon one’s bullish or bearish investment bias, several bellwether financial stocks received upgrades: GS, AXP, and UBS.

Economic data also revealed July PPI numbers came in lower than expected and housing starts and building permits fell short of consensus estimates.

Despite today’s positive performance, equities were still unable to resume their short-term uptrends. However, the DIA and SPY were upgraded to short-term lateral trends and market momentum (see table below) reversed its direction upward.

The VXX (short-term futures volatility exchange traded fund) managed to sustain its newly established short-term uptrend and therefore the tug of war battle between bulls and bears is still in progress.

(For a detailed analysis of today’s positive & negative earnings surprises, please refer to Hillbent’s earnings summary reports.)

ETF Sectors and Key Industries: Short-term trend upgrades (XLP, XLI, XLF, XLK, RKH, RTH, SMH, IYT). It is worth noting that 9 out 10 of the major sectors were up on lower volume, which indicates systematic distribution.

ETF International Equity Indexes: Short-term trend upgrades (EWW, EWU, VGK, IEV, EWA, EWJ, GML, GAF). Despite the global rebound in stocks, international markets are technically weaker overall vs. the U.S. markets.

ETF Commodities: Short-term trend upgrades (USO, UGA, DBC); and Intermediate-trend upgrades (DBC, DBA). Dollar weakness buoyed commodity related securities in today’s trading session.

ETF Forex: Short-term trend downgrades (UUP, CEW); Short-term trend upgrades (FXE, FXB, FXA, FXM, BZF).

ETF Bonds: Short-term trend upgrades (TIP, EMB); Short-term trend downgrades (TLT, AGG);and Intermediate term trend upgrades (TIP).

ETF Real Estate: Short-term trend upgrades (XHB, REM).

Signing off @ Hillbent for The Market Direction…

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Disclosures: Hillbent.com, Inc. or its affiliates may own positions in the equities mentioned in our reports. We do not receive any compensation from any of the companies covered in our reports.

Comments

[Alan Young]

Not only was volume weak, but most indexes failed to close the gap down from Friday. Not even what you'd call an oversold bounce.
If you're ready to say this bear-market rally is over, I wouldn't disagree.

2009 Aug 19 09:14 AM

[enigmaman]

Is there an ETF that can be used to trade against the dollars move, not sure if Im phrasing this properly but it seems that this rally has been doing just that.

2009 Aug 20 10:56 AM

[J Clinton Hill]

enigmaman,

consider the UDN (u.s. dollar bearish etf fund) if you don't want to select an alternative currency that is non-correlated to the dollar


On Aug 20 10:56 AM enigmaman wrote:

> Is there an ETF that can be used to trade against the dollars move,
> not sure if Im phrasing this properly but it seems that this rally
> has been doing just that.

2009 Aug 20 11:32 AM

[enigmaman]

thank you, its a place to start and learn


On Aug 20 11:32 AM J Clinton Hill wrote:

> enigmaman,
>
> consider the UDN (u.s. dollar bearish etf fund) if you don't want
> to select an alternative currency that is non-correlated to the dollar
>

2009 Aug 20 11:50 AM

[Michael E. Phelan]

Since I'm new to your column, please explain the time frame for "short term"; "Intermediate" and "Primary".

Thx,
Mike

2009 Aug 20 06:21 PM

[J Clinton Hill]

hi michael,

the trends i use are based upon hillbent's proprietary algorithms

in answering your question, i am making an assumption that your background to technical analysis is beginner level.

regarding time-frames, i am basing this upon standards for 3 basic types of traders: short term = day or swing traders, intermediate = position traders, and primary = asset allocators.

in general, trends can be defined by timeframes and short-term usually = daily, intermediate = weekly, and primary = monthly or quarterly...

however, these rules are not absolute as trend analysis, while it can be mechanical, is still somewhat subjective based upon the analyst's preference for proprietary algorithmic settings....

2009 Aug 23 07:58 PM