Charts I'm monitoring

Aug 17, 2021

In a recent post (‘Treading lightly’), I discussed various negative divergences as well the the weak action in stuff like KWEB (China tech). Unfortunately, there’s still concern with this market, including this new 8-month low in the Nasdaq cummulative A/D line.

What this chart is saying is that more Nasdaq components have made cummulative declines than advances in the past 8-months. Should we care?

Sometimes, breadth deterioration is an early warning sign, sometimes it’s not. What I pay most attention to is important price levels holding. Let’s go through 7 key charts and their levels that I’m watching.

Broad ETFs

Both IWM (US small-caps) and FRDM (select emerging markets) have been going sideways for most of this year. Watch for this range support to hold.

Tech Sector

I have been bullish on tech since May this year, but lately the price action has been iffy. Lots of individual names are breaking down. Here are 2 tech ETF’s (SMH and BUG) that need to hold support:

Commodities

A very different part of the equity market is Uranium and Copper miners. Here are support levels to watch on the URNM and COPX ETFs:

The Dollar

Finally, keep an eye on the US Dollar Index. It’s been basing all year and a breakout would be another sign of risk-off.

Summary

With breadth making new 8-month lows, and several ETFs on the verge of breaking support, I continue to tread lightly. However, one of the sectors that still stands out as bullish to me is health care. I wrote about it yesterday here: link.

Thanks for reading.

Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.