It sure is!
Wall Street ended lower this past week over concerns that Britain will vote this Thursday to break with the European Union and go it alone. The adverse impact that would have on the global economies is keeping markets on edge and trading more volatile.
This Brexit thing has caused risk-appetite to diminish and set global markets tumbling. Add to this that one bearish crosscurrent after another appears to be hitting the markets, which has investors unloading stocks and flee into safe-haven assets like gold and Treasury issues.
Yet, over the past couple of weeks there have been signs of a tightening labor market along with rising wages and pickup in consumer spending. That's the kind of stuff this bull market likes to feed on.
But with the ranks of market participants getting thinner there is no lift in this game and upside momentum has practically vanished.
Check this daily DOW chart [INDU] and note that the Moving-Average configuration is totally neutral as the red MA line has merged with the green MA line.
If the red line manages to cross above the green, the market will be triggered to rally. But for as long as the MACD momentum bars remain below the demarcation line the ranks of market participants will get thinner still and rob any rally's upside momentum.
While the RSI strength indicator remains in its bearish territory below the neutral line, the DOW keeps moving sideways in a consolidation mode and that keeps the hope for a rally alive.
This [SPX] weekly chart looks further out and sees the return of the bull. While this index is consolidating, the RSI strength indicator and MACD momentum bars are still in their respective bullish territories.
But most importantly, the MA lines configuration is starting to turn bullish as the red line is inching above the green line.
It will take some more time, but the odds are on the bull's side.
This [RSP] chart shows what's really going on in this market. While this index rallied strongly at the beginning of June, is was well supported by a renewed bullish MA lines configuration with the red line solidly above the green.
But with the MACD momentum bars slipping below the demarcation line into bearish territory, there simply was no and still is no upside momentum to fuel this rally. This is also why the RSI strength indicator is stuck close to its neutral line.
Check these two "aristocrat" ETF dividend charts [NOBL] and [OUSA.] Both of these ETF funds are managed by some of the sharpest minds in the investment business. Note that both charts show the same configurations and act as excellent precursors of pending market action ahead.
While both indexes rallied strongly between the middle of January and early April, they became overbought and top-heavy as a wide gap formed between the red MA line above the green. That brought the rally in the overall market to a dead stop.
But both these indexes hung in there and consolidated while moving sideways. This implies that the market will rally again once the MACD momentum bars are showing strength above their respective demarcation lines.
So the trading sessions over the next couple of weeks should show if the market has what it takes to reach for higher highs.
The MA lines configuration for NASDAQ [NDX] is turning bullish with the red line crossing above the green. But for as long as the MACD momentum bars remain bearish below the demarcation line, this index won't have a chance to rally in a consistent fashion.
The commodity market [DBC] engaged in a terrific rally between early February and early June. But note that during this rally the MA lines configuration blew a fat overbought bubble between the red line above the green. Also, participation in this rally was fading fast as the MACD momentum bars crossed below the demarcation line.
All of this shows that commodities generally are poised to the downside.
Wall Street's fear index the [VIX] is sending an ominous message to the market. Not only did this index snap out of its consolidation mode up to a bearish stiff 21 level reading, but the MA lines configuration with the red line above the green warns the market to more downside ahead.
Add to this an extremely bearish [for the market] MACD momentum bars on top of the demarcation line and ditto for the RSI strength indicator, and one can just hear the bears smacking their lips.
But there is hope that the bulls will come out of this squeeze unscathed. The market tends to rally quickly most of the time when the VIX spikes like this. But then again, the market could become part of a larger selloff that would take weeks to resolve.
So expect one or the other, but nothing moderate in between. Check the VIX spikes between last November and February, and you'll get the picture.
Check the [50R] chart and note the bearish MA lines configuration with the red line below the green. This means that most of the market participants have left the equity game and won't return until the RSI strength indicator and MACD momentum bars are back above their respective demarcation lines.
At first glance it appears that the bulls in this market [SPXL] have gone into hiding. Besides this declining index the RSI strength indicator and MACD momentum bars are both in their respective bearish territories south of their demarcation lines.
But check the MA lines configuration with the red line above the green, and know that the bulls are snorting somewhere, ready to stampede again.
Although the market feels bearish enough, the bears [SPXS] are in no shape to maul the market. Sure, recently this index was able to lift a bit off the bottom when it got some support from the bearish MACD momentum bars on top of the demarcation line.
But for as long as the MA lines configuration remains bearish with the red line below the green, the bears remain subdued.
At first glance this chart for [GOLD] sure looks bullish. This index is soaring, the MACD momentum bars are bullish on top of the demarcation line and so is the RSI strength indicator.
But for as long as the MA lines configuration remains bearish with the red line below the green, the gold-bugs continue to scate on thin ice.
Although oil [WTIC] had a sharp pullback, it remains a bull for as long as the MA lines configuration remains positive with the red line above the green. Still, with the MACD momentum bars below the demarcation line oil will have a tough time rallying.
But after touching bearish territory the RSI strength indicator is back above its neutral line which, if it holds, could be a bullish impulse for oil.
This is one week where political cross currents over-there as well as over-here could knock any market for a loop. So it's best to sit tight and just watch the market do its thing.
But just in case it is doing it your way, here are some favored ETFs to keep on tap.
Energy, Materials, Financials, Technology, Health-Care;
Leveraged Bull ETFs:
Financials 2x (NYSEARCA:UYG), DOW 2x (NYSEARCA:DDM), Large-Caps 2x (NYSEARCA:FLGE), Industrials 2x (NYSEARCA:UXI), Mid-Caps 3x (NYSEARCA:MIDU), Small-Caps (NYSEARCA:SAA), Semis 2x (NYSEARCA:USD), Technology 3x (NYSEARCA:TECL), Materials 2x (NYSEARCA:UYM);
Non-Leveraged Long ETFs:
Mid-Caps (NYSEARCA:IWS), S&P 500 (NYSEARCA:IVW), NASDAQ (NYSEARCA:QLD), High- Dividend (NYSEARCA:HDV), Mid-Caps (NYSEARCA:REGL), Energy (NYSEARCA:RYE), Materials (NASDAQ:PYZ), Semis (NYSEARCA:SMH), Financials (NYSEARCA:IYF), Technology (NASDAQ:TDIV);
leveraged Bear ETFs:
S&P 500, 2x (NYSEARCA:SDS), NASDAQ 2x (NYSEARCA:QID), Financials 2x (NYSEARCA:SKF), Small-Caps 3x (NYSEARCA:TZA), DOW 2x (NYSEARCA:DXD), Russell 2x (NYSEARCA:TWM), Mid-Caps 3x (NYSEARCA:MIDZ) Technology 3x (NYSEARCA:TECS), Semis 3x (NYSEARCA:SOXS);
Non-Leveraged Short ETFs:
Financials (NYSEARCA:SEF), Base-Metals (NYSEARCA:BOS), DOW (NYSEARCA:DOG), Materials (NYSEARCA:SBM), Mid-Caps (NYSEARCA:MYY), Emerging Markets (NYSEARCA:EUM), NASDAQ (NYSEARCA:PSQ), Russell (RWM, Small-Caps (NYSEARCA:SBB);
Check my HOME-PAGE for more ETF and market info; and