|ETF Global Opportunities
By Tarquin Coe
5 July 2018
Last week we showed medium-term breadth for the market to be in reasonable health. Short-term breadth is showing improvement and that in turn will soon strengthen the medium-term indicators.
The NYSE % 10-week moving average and NASDAQ % 10-week moving average indicator have curled up the past week. Today's strength should seem both strengthen further.
We remain net long U.S. equity funds.
This Week's Trades
US Equity Indices
The NASDAQ 100 ETF is consolidating following its record high in June. A pull-back occurred into the 50-day exponential moving average.
The P&F chart shows trading remains above the long-term rising trendline.
Strength should soon resume.
US Sector Indices
The Consumer Discretionary fund remains at record price and relative highs on its P&F charts. The past couple of weeks have seen those trends consolidate, normal healthy action in an uptrend. Watching for an upside reassertion soon.
Buy advice reiterated.
Other Developed Indices
The Europe 350 Index ETF is attempting to find support across the $44 level. Support was found there in mid-2017 on a correction during that year's rally. However, given the weak relative P&F chart, versus the U.S. equity market, the fund is best avoided. That relative P&F chart broke down to new long-term lows last month.
The India fund is set to soon print new 52-week lows. The 14-day RSI is not oversold and that will permit further weakness. Next downside level to watch is $75.
The P&F relative chart remains in a long-term downtrend, a strong reason to avoid longs.
The British Pound Sterling Trust remains in it downtrend off the April peak. Attempts to reverse that trend on the way down have all failed a week or two later. With momentum no longer being oversold, the downtrend should soon resume. $125 is the next level to watch and should that fail to halt the decline, then $120 is next.
Since last week's report the Gold fund has weakened. However, a positive development has occurred. The price is finding support from the December 2017 low and given that momentum is oversold, that could result in a tradeable oversold bounce.
Long-term we would remain cautious given the downtrend of the past 5 years against the equity market.
The 20+ years Bond Fund is now testing the top end of its 5 month range, marked out by peaks in March and May. Clearing those highs would activate a bottom, projecting a move up towards $128.
The P&F relative chart, versus the equity market, shows a base underway of its own since the start of January.
Current yield is 2.54%.
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