Weekly Charts Of These 17 ETFs Indicate Risk Of A Stock Market Correction In Second Half 2017 – Forbes

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photographer: Michael Nagle/Bloomberg

The S&P 500 is divided into 11 sectors and each sector can be traded using its own exchange-traded fund.

The key takeaways from last week’s trading involve these 17 ETFs.

In the “flight to safety” categories the iShares Barclays 20+ Year Treasury Bond ETF traded to a new 2017 high despite rate hikes by the Federal Reserve. The Utilities SDPR ETF set its all-time high on June 2, which was a test of my semiannual risky level of $54.29, where investors were advised to reduce holdings. A dividend yield of 3.24% was just not compelling enough.

In the “markets” ETFs, SPDR Dow Jones Industrial Average (DIA) was the only ETF to set a new all-time high last week, as the Dow set its all-time intraday high of 21,535.03 on June 20. The PowerShares QQQ regained some momentum as the Nasdaq is the best performing of the five major U.S. equity averages, up 15.9% year-to-date.

Among the 11 S&P sector ETFs, the Energy Select Sector SPDR set its post-election low on June 21 as crude oil tested my semiannual value level of $43.04. It’s not the time to bottom-fish on the energy ETF, but it’s time to add to positions in components and Dow Stocks Chevron (CVX) and Exxon Mobil (XOM) for their dividend yields of 4.11% and 3.80%, respectively. The strategy was to sell the utilities ETF (XLU) near its high, and to buy the oil giants and “Dogs of the Dow” near post-election lows.

Consumer spending represents nearly 70% on the economy and both the consumer discretionary and consumer staples ETFs now have negative weekly charts.

The health care ETF (Health Care Sector) set an all-time intraday high last week as health insurers rallied on Senate progress on plans to repeal and replace ObamaCare. In addition, a rebound in momentum stocks kept the tech sector ETF (Technology Select Sector SPDR) overbought.

Scorecard For 17 Exchange-Traded funds

Scorecard For 17 Equity ETFs

Global Market Consultants

Scorecard For 17 Equity ETFs

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The “Flight To Safety” ETFs

Treasury Bond ETF    

Weekly Chart For Treasury Bond ETF

Courtesy of MetaStock Xenith

Courtesy of MetaStock Xenith

The U.S. Treasury 30-Year Bond ETF trades like a stock using the iShares Barclays 20+ Year Treasury Bond ETF (TLT), which is a basket of U.S. Treasury bonds with maturities of 20-plus years to 30 years. As a stock-type investment it never matures and interest income is converted to periodic dividend payments.

The yield on the 30-Year U.S. Treasury bond traded to a new 2017 low of 2.710% on Friday, and thus the weekly chart for the Treasury bond ETF ($127.78 on June 23) is positive but overbought with TLT above its five-week modified moving average of $124.63. The bond ETF has been above its 200-week simple moving average of $121.18 or the “reversion to the mean” since the week of May 19. The 12x3x3 weekly slow stochastic reading rose to 86.04 last week, up from 83.51 on June 16, moving further above the overbought threshold of 80.00. Buy weakness to my weekly and quarterly value levels of $124.22 and $120.23, respectively. Sell strength to my annual risky level of $132.13.

Gold Bullion

Investors can trade gold bullion like a stock using the SPDR Gold Shares ETF (GLD).

Comex gold futures ended last week just above its reversion to the mean of $1,233.3 the troy ounce. The weekly chart for the bold bullion ETF ($119.43 on June 23) remains negative with the GLD just below its five-week modified moving average of $119.67 and above its 200-week simple moving average of $118.23, which is the reversion to the mean, tested several times since the week of Feb. 24. The 12x3x3 weekly slow stochastic reading ended last week at 62.05, down from 65.91 on June 16. Buy weakness to my weekly and quarterly value levels of $116.66 and $116.89, respectively. Sell strength to my annual risky level of $160.24.

Utilities

Weekly Chart For The Utilities ETF

Courtesy of MetaStock Xenith

Courtesy of MetaStock Xenith

Investors seeking the safety of dividends can trade the Utilities SDPR ETF (XLU), which is a basket of 28 utility stocks. This ETF ended last week with a dividend yield of 3.28%.

The weekly chart for XLU ($53.21 on June 23) is positive but overbought with the ETF above its five-week modified moving average of $53.00. The ETF is above its 200-week simple moving average, or the reversion to the mean of $45.15. The 12x3x3 weekly slow stochastic reading slipped to 82.94 last week, down from 87.04 on June 16, becoming less overbought versus the 80.00 overbought threshold. Buy weakness to my annual value level of $50.72. Sell strength to my semiannual risky level of $54.29, which was tested at the June 2 high. In-between are quarterly, and monthly pivots of $51.19 and $52.43, respectively.

The Five ETFs Representing The Five Major Averages

Weekly Chart For Diamonds

Courtesy of MetaStock Xenith

Courtesy of MetaStock Xenith

The weekly chart for SPDR Dow Jones Industrial Average (DIA) ($213.74 on June 23) is positive but overbought with the ETF above its five-week modified moving average of $211.05 and above its 200-week simple moving average or reversion to the mean at $176.58. The 12x3x3 weekly slow stochastic reading rose to 88.27 last week, up from 85.76 on June 16, moving further above the overbought threshold of 80.00. Buy weakness to my quarterly value level of $191.55. Sell strength to my monthly, annual and semiannual risky levels of $219.82, $220.14 and $221.34, respectively. My annual value level is $150.83.

The weekly chart for SPDR S&P 500 ETF Trust (SPY) ($243.13 on June 23) is positive but overbought with the ETF above its five-week modified moving average of $241.03. The 200-week simple moving average or reversion to the mean is $204.52. The 12x3x3 weekly slow stochastic reading ended last week at 86.91, slipping from 87.94 on June 16, still well above the overbought threshold of 80.00. Buy weakness to my quarterly value level of $221.96. Sell strength to my monthly and semiannual risky levels of $245.24 and $248.68, respectively. My annual value level is $167.75 with my annual risky levels of $253.37.

Weekly Chart for QQQ's

Courtesy of MetaStock Xenith

Courtesy of MetaStock Xenith

The weekly chart for PowerShares QQQ Trust (QQQ) ($141.24 on June 23) remains positive but overbought with the ETF above its five-week modified moving average of $138.70. The 200-week simple moving average or reversion to the mean is $105.96. The 12x3x3 weekly stochastic reading declined to 82.16 last week, down from 87.63 on June 16, and could end June below the overbought threshold of 80.00. Buy weakness to my quarterly value level of $125.38. My monthly, semiannual and annual pivots are $138.75, $139.27 and $139.42, respectively. My annual value level lags at $98.20. This week’s risky level is $143.85.

The weekly chart for iShares Transportation Average ETF (IYT) ($169.64 on June 23) is positive with the ETF above its five-week modified moving average of $166.95. The 200-week simple moving average or reversion to the mean at $146.38. The 12x3x3 weekly slow stochastic reading rose to 73.54 last week, up from 65.58 on June 16. Buy weakness to my weekly value level of $167.58. Sell strength to monthly and annual risky levels of $180.00, and $182.54, respectively.

The weekly chart for iShares Russell 2000 ETF (IWM) ($140.91 on June 23) is positive with the ETF above its five-week modified moving average of $139.23. The 200-week simple moving average or reversion to the mean is $118.83. The 12x3x3 weekly slow stochastic reading ended last week at 71.72, up from 67.52 on June 16. Buy weakness to my quarterly value level of $121.48. Sell strength to my monthly and annual risky levels of $144.06 and $154.33, respectively.

The 11 Sector ETFs

The weekly chart for SPDR Dow Jones REIT ETF (RWR) ($94.09 on June 23) is positive with the ETF above its five-week modified moving average of $93.11. The 200-week simple moving average is the reversion to the mean at $87.93. The 12x3x3 weekly slow stochastic reading rose to 53.67 last week, up from 47.20 on June 16. Buy weakness to my quarterly value level of $90.33. Sell strength to my semiannual risky level of $101.09. My annual risky level is $112.38.

The weekly chart for the Materials Select Sector SPDR (XLB) ($53.85 on June 23) is positive with the ETF above its five-week modified moving average of $53.46. The 200-week simple moving average is the reversion to the mean at $47.51. The 12x3x3 weekly slow stochastic reading rose to 78.04 last week, up from 77.90 on June 16, rising close to the overbought threshold of 80.00. Buy weakness to my quarterly value level of $45.70. My monthly pivot is $54.97. Sell strength to my semiannual risky level of $55.87. My annual risky level is $61.72.