Weekly Market Outlook

Changing of the Guard

September 20, 2020


US Equity Markets mostly retreated, led by the NASDAQ 100 which was down -1.32% for the week. The major theme is that rotation is occurring across all asset classes with new leadership appearing. Making up for lost ground, Small Caps rallied with Grandpa Russell (IWM) closing up +2.78% for the week on improving volume. Value stocks (VTV) which have been lagging Growth stocks (VUG) for

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Sector Summary

These 11 basic sector ETFs will keep you in the primary market trends if you follow the leaders on a 6-month basis. Use the Phases and 3-month % Change for more active trading.

Chart Last Updated: September 18 2020

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To see key chart levels click here.

Category: Risk On/Off

Description:

This table tracks key performance and indicator data for the major U.S. sector ETFs. In addition to seeing the daily price change, highs, lows, and volume, we also display the market phase and longer-term price performance. This can be used to identify key performance stats for any individual instrument or to access how they are performing overall as a group.

What to look for:

  • Are the majority in the same phase? Are there any phase changes? (Indicated by an "!" and highlighted color)
  • How many have positive 6 mo change (see power of summing up this data below)
    • Pullbacks that stay over the 40 week (200 day) MA with a high number of sectors with 6 mo. positive returns can be seen as more shallow dips and a potential buying opportunity.

How To Use The 6-Month Percent Change:

In the basic tabular format the 6-month momentum is a good gauge of whether you should have a bullish or bearish bias as stocks with positive momentum often tend to continue in the direction of their primary trend.

The aggregation of the number of sectors in this table with positive 6-month percentage changes has also demonstrated to be a powerful market timing indicator.

The basic interpretation of this chart is:

Bullish if the SPY is over the 200-day or 40-week average (blue) AND there are 3 or more sector ETFs with a positive 6-mo. Change or...

Bearish if the SPY is under the 200-day or 40-week average (blue) AND there are less than 3 sector ETFs with a positive 6-mo. change.