I was going through my daily routine of reading other blog sites. While on one of my favorites, Slope of Hope, I noticed several comments from Slopers about how they are selling China by selling the ETF $YINN, Direxion Daily FTSE China Bull 3X Shares. So I decided to see what the models said about $YINN and its counterpart inverse $YANG, Direxion Daily FTSE China Bear 3X Shares. The models disagree. The models say buy $YINN. The models expect a 10-15% increase in $YINN over the next 30 trading days. Below is the Estimated Percentage Change chart for $YINN and $YANG with data subscribers to ETF Expectations get in a spreadsheet. We’ll see.
Based on the corresponding ETF averages, let’s look at last night’s sector strength chart; the overall average remains a solid bearish value of 3.12.
A review of the individual charts has only two charts interesting to me; they are Biotechnology and Health Care. What catches my eye is that they both show moderate bullishness at the start of August. Here is Biotech with an overall average of 4.16. See the dip in the second week of July; the models predict its strength to the bullish side from there. Likewise, Health Care has a weaker average of 3.12, showing a similar pattern. As for the rest of the sectors, Energy has an average of 3.62 and shows a flat pattern. Precious Metals and Miners follow Energy with an average of 3.5. Next is Non-US stocks with a computed score of 3.27. This is followed by Commodities, averaging a value of 3.22, with a predicted up-trend line. Bonds are up next with a value of 2.95. Then Real Estate at 2.85. Technology moves up to the tenth slot with a computed value of 2.8. Slipping into eleventh is the Consumer sector with a score of 2.62. Then US Stocks at 2.56. And finally, the Financial sector finishes the group with a low score of 2.48.
So all thirteen sectors tracked by the models remain bearish.
Let’s look at last night’s sector strength chart based on the corresponding ETF averages; this week’s overall average has a solid bearish value of 3.11. Do you see the light at the end of this bear market tunnel? I do. I see the oncoming market crash.
Let’s review the individual charts. The best is the Precious Metals and Miners, with an average 30-day score of 4.14. The Energy sector follows with a score of 4.02. The third sector is Commodities, scoring 3.64. Following Commodities is the Bond sector with an average of 3.5. The Non-US Stock Market follows with an average of 3.47 and Emerging Markets with 3.43. Seventh on the list is the Biotechnology sector scoring an even 3.0. Then Health Care follows with a score of 2.85. The Financial sector closely follows Health Care by scoring 2.82. Up next is Real Estate, scoring 2.71. And the last three are the Consumer sector, with 2.4, US Stocks, with 2.34, and the Technology sector, with 2.16.
So all thirteen sectors tracked by the models are bearish.
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The above chart is red except for the line representing the Energy sector. But even Energy is starting to show bear numbers too.
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Let’s look at last night’s sector strength chart based on the corresponding ETF averages; this week’s overall average has a strong bearish value of 3.91; are you surprised? 3.91 is worse than last week’s 4.38.
Two of the thirteen sectors tracked this week are in the bullish zone; there were four bullish sectors last week. The bullish sectors are Energy and Commodities The Financials sector and Foreign Stock Markets joined the bearish sectors from last week’s group.
Reviewing the individual charts, Energy has an average score of 6.06, with most of its strength starting in a little more than a week. The Commodities sector barely makes it into the bull category with a score of 4.58, let’s put some emphasis on the words – barely makes it into the bullish category.
Starting with the bearish sectors first is Non-US Stock Markets with a score of 4.18. Then follows Emerging Markets, averaging at 3.92. The third bearish sector is Real Estate, with a score of 3.87. Up next is the Bond sector, with a score of 3.71. Closely following Bonds is the Financial Sector with a score of 3.7. The Biotechnology sector scores 3.69. In quick succession, there are Precious Metals and Miners at 3.66, the Consumer Sector at 3.63, and Health Care with a score of 3.61. Tenth in the bearish group is US Stocks, with a score of 3.51. And finally, the last sector is Technology, with a meager score of 2.7. The interesting aspect about the Tech numbers is that the daily number never goes into the bullish zone. Tech is the only sector that does that.
Let’s look at last night’s sector strength chart based on the corresponding ETF averages; this week’s overall average is still bearish with a value of 4.38, which is better than last week’s 4.00.
This week, four of the thirteen sectors tracked are in the bullish zone; there were only two bullish sectors last week. The bullish sectors are Energy, Commodities, Financials, and Foreign Stock Markets. The bearish sectors are Real Estate, Emerging Markets, Bonds, Health Care, US Stocks, Tech, Metals & Miners, Consumer, and Biotech.
Looking at the individual charts; Energy comes in with an average score of 6.2, with most of its strength at the end of this month. The Commodities sector scores 5.16 and peaks twice; once next week and the second time after the fourth of July. The Financial sector is third with a score of 4.97 but falls off quickly starting in July. And the last bullish sector is the International Stock Market scoring a weak bullish number of 4.67.
Starting with the bearish sectors first is Real Estate with a score of 4.46; it was a bullish sector last week. Then follows Emerging Markets, averaging at 4.36. The third bearish sector is Bond Sector, with a score of 4.10. Following Bonds is the Health Care Sector also with a score of 4.10. Fifth in the bearish group is US Stock Market, with an average 30-day score of 4.00. US Stocks are closely the Technology sector with a score of 3.86. Tech is followed by the Precious Metals and Miners sector, scoring 3.84. The eighth sector is the Consumer sector, with a score of 3.72. And finally, the last sector is Biotechnology at 3.54.
So nine out of the thirteen sectors, the models’ track are bearish, and the remaining four are bullish.
Let’s look at last night’s sector strength chart based on the corresponding ETF averages; this week’s overall average is still bearish with a value of 4.00, which is up marginally from last week’s 3.88.
Since the bearish and bullish calls for this week are the same as they have been for the past several weeks, I will do the sector review differently. Today I present the 30-day average for each sector from bullish to bearish. To start things off, and as it has been for the past six weeks, the Energy sector has a weak bullish number at 5.57. As I have mentioned in previous videos, I prefer to see a number above 6.5.
Coming in second on the bullish side, for the third week in a row, is the Real Estate sector. Its average value is 4.69, which is barely above the neutral number of 4.5.
Starting with the bearish sectors first is Commodities with a score of 4.27. Then follows the Financial sector, averaging at 4.15. The third bearish sector is Health Care, with a score of 4.11. Following Health Care is the International Markets with a value of an even 4. Fifth in the bearish group is Precious Metals and Miners, with an average 30-day score of 3.88. The Bond sector closely follows Metals and Miners with a score of 3.87. Bonds are followed by Emerging markets, scoring 3.73. The eighth sector is the US Stock Market, with a score of 3.64. At third to last is the Consumer sector, which averages a 3.63. And finally, the last two sectors are Biotechnology at 3.23 and Technology at 3.20.
So eleven out of the thirteen sectors, the models’ track, are bearish, and the two bullish sectors are barely bullish.
Like the battery rabbit, it just keeps going and going. $UNG and $BOIL have appeared as top picks for the past several weeks by the ETF Expectation models, and as of last night, they still are.
I have read that the Europeans are buying up American natural gas by the boatload due to the Ukraine-Russian war. I will use that to confirm the continuing price surge.
An old financial adage states that the stock market’s action leads the economy by six months. Which begs the question, where will the economy be in November? Here is a chart using experimental models for predicting out 180 days. The graph shows the strength prediction for $QQQ; the red line on the chart is the mean average. The value is somewhere around 3.85, which is well into the bearish zone. The models call for the overall U.S. markets to remain bearish through the end of November. The correction is happening now; what are you doing to survive financially?
Let’s look at last night’s sector strength chart based on the corresponding ETF averages; this week’s overall average is still bearish with a value of 3.88, which is down slightly from last week’s 3.98.
For the fourth week in a row, the Technology sector has a bearish forecast for the next 30 trading days, with an average score of 3.07. Next week, the Consumer sector has a poor prospect; the computed average is 2.4. In this sector, $XLP may have the worst results.
The Energy sector continues to have the best short-term prediction. This week, the models predict it to occur from June 21 through 27 with a computed average of 5.8. The estimated best ETF in that sector for that period is $AMLP. The models also have the Real Estate sector recovering starting in the middle of June, and as I reported on my blog Friday morning, I am having a hard time believing the models.
The models have been very successful over the past three months. But to call for a bullish move in the Real Estate sector with what is going on now seems wrong. The models call for Real Estate to be very weak in the next couple of weeks but finish strong through the beginning of July.
The Technology sector has a bearish forecast for the next 30 trading days, with an average score of 3.26. The Consumer sector has an underperforming prospect in the 1 to 4 day period; the computed average is 2.39. In this sector, $XLP may have the lowest results. Coming in second with a weak prospect is the Real Estate sector for the same period with a computed strength of 2.46. The models expect the ETF $XLRE to finish the worst in this group.
The Real Estate sector has the best short-term prediction, which should occur in 17 to 20 days with a computed strength of 5.75. The estimated top ETF in that category for that period is $DRN.
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