Edition 0013. 04.09.2022. Week of 04.04 - 04.10.2022.
This weekly commentary examines 9 U.S. equity indices. To increase the utility of this research, we use ETFs where possible. Our aim is to develop a clear picture of how the U.S. market is performing. We analyze performance, price, trend, and momentum.
The U.S. Equity Landscape
Performance table sorted by the 1-week rate-of-change.
Click here for the performance table guide. Click the performance table to enlarge.
Last week was, on average, a losing week for US equity indices. Strikingly, it was the Dow Transports that led the losses giving back 6.71% in value and closing at a 13-week low. In contrast to that was the 1.2% gain in value from the Dow Utilities which recorded an all-time closing high. Add to that the fact that small-cap indices also lagged, and that is a very defensive posture for market participants to take.
Performance table sorted by the year-to-date rate-of-change.
Click here for the performance table guide. Click the performance table to enlarge.
US Equity Landscape Performance Year-to-Date Chart.
Click to enlarge.
Year-to-date, the Dow Utility Average remains decidedly positive while all of our other symbols are not. It is also the only symbol in our universe that is in an uptrend with positive momentum as determined by our quantitative model. The Dow Transportation Average continues its sharp drop as it moved from 2nd position to 8th position in just 2 weeks.
The Charts!
QQQ: The Nasdaq 100 ETF. Click to enlarge.
QQQ lost 3.51% in value last week. Price closed below its flat 40-week simple moving average. Momentum has flattened just under its average line below 0. Price has closed below its September 2021 swing low of $350. QQQ remains a downtrend.
Standard & Poor’s ETFs
SPY: The S&P 500 ETF. Click to enlarge.
SPY lost 1.18% in value last week. Price has closed below its upward sloping 40-week simple moving average. Momentum has flattened below its average line, which is just above 0, while momentum is below 0. Price remains rangebound between $480 and $426.
IJH: The S&P 400 ETF. Click to enlarge.
IJH lost 3.4% in value last week. Price closed below its downward sloping 40-week simple moving average and trendline. Momentum has turned back down as it ran into its average line and downward sloping trendline while staying below 0. Price remains in its 1-year long range.
IJR: The S&P 600 ETF. Click to enlarge.
IJR lost 4.38% in value last week. Price remains below its downward sloping 40-week simple moving average and downward sloping trendline. Momentum has unsuccessfully tested its average and downward sloping trendline from below while under 0. Price remains in its year-long range.
The Russell ETFs
IWB: The Russell 1000 ETF. Click to enlarge.
IWB lost 1.51% in value last week. Price closed below its upward sloping 40-week simple moving average. Momentum has flattened below its average line from below 0. Price remains rangebound.
IWM: The Russell 2000 ETF. Click to enlarge.
IWM lost 4.56% in value last week. Price has closed below $207 which has been the bottom of IWMs 10-month range. Price remains below its downward sloping 40-week simple moving average. Price looks to be in a consolidation pattern in its newly formed downtrend. Momentum is turned down from its average line while under zero. Price remains in a downtrend.
Dow Jones Indices
DJT: Dow Jones Transportation Average. Click to enlarge.
DJT was the weakest of our universe of symbols for the second week in a row. It lost 6.71% in value last week. Price closed below its downward sloping 40-week simple moving average. Momentum has tuned down from its lower-high and is looking to test its 0-line from above. It is difficult to label the transports as rangebound with a more than 21% drawdown from its high, but above 13,946.50 I am keeping the rangebound call intact.
DJI: Dow Jones Industrial Average. Click to enlarge.
DJI lost 0.28% in value last week. Price continued printing dojis candlesticks below its declining 40-week simple moving average. Momentum continues to increase, though is flattening, below its falling moving average line while below 0. Above 33,515, price remains rangebound.
DJU: Down Jones Utility Average. Click to enlarge.
DJU gained 1.28% in value last week. Price has printed another all-time closing high. The large, 2-year long ascending triangle projects a measured move up to 1,161.50. Momentum continued its acceleration to the upside. This remains the only symbol in our universe that is quantitatively in an uptrend with a positive momentum condition AND has a positive year-to-date performance. That YTD gain is now 9.18%. Price is in an uptrend.
Conclusion & Trend Summary Table
Last week was painful for equity indices, save DJU. Perhaps market participants are looking to the utility index as a low-beta option. The leader continues to be DJU and the laggards continue to be IWM and QQQ. The Transports are nose diving lower.
The quantitative model has downgraded DJI from range to downtrend and DJT from uptrend to downtrend. It has also downgraded SPY and IWB from uptrend to range, as well as QQQ from range to downtrend. We can see the my determination differs on IJH, IJR, DJT, and DJI. This is because I am subjectively taking a long term view. The model sees price below a declining moving average, while I more subjectively see that these symbols remain above even their 38.2% retracements after making monster moves from the 2020 lows.
Comments