Commentary

Market Summary – April 16

ETF Summary

This was a modest positive day, but the technical situation is becoming a little questionable.

I added a column showing jifPrice to the summary. Theoretically, a closing price higher than jifPrice is positive and a lower close is negative. I wrote a little explanation of jifPrice today for the Methodology section and am planning to test whether there is a way to take advantage of that. Wild guess – probably not.

QQQ Daily

QQQ looks like the best of the major index ETFs. With a higher high, low, and close there is no question April 6 was a positive day. The candle structure for the last 3 days is a little dubious with the small real bodies (distance between the open and close), but small real bodies have happened relatively often on this rally and higher prices seem to usually follow. The 3 day period that produced the last blue candles at the beginning of March was one similar negative example. We can note the pattern arising after the the white candles at the end of March where the next two green short bodies appeared before the rally of the last few weeks.

SPY Daily

SPY is slightly worse. After taking a long position on the close of the green candle produced on April 12, the algorithm finds itself in a long position for 2 days and just breaking even. Not the end of the world, of course, but you don’t play a momentum system to break even.

IWM Daily

This is a unique formation I think. Four green candles in a row have been produced with lower closes than opens. This candle will probably change color tomorrow unless it does something good.

KRE Daily

I mentioned previously that I wasn’t completely convinced by the buy signal given by KRE on April 12, and on Monday, not only was the previous gain almost completely erased but it even dipped below the 54 day moving average. Today it recovered the entire loss, so the market is giving us another chance. I call this formation an oreo, where two down candles sandwich an up candle (I also call the opposite formation an oreo). Logically it is bullish, but my curiosity over how this will play out doesn’t include anything close to conviction. I’m still neutral.

XBI Daily

XLV Daily

XLV and XBI are together. Health care is the most unhealthy part of the market at the moment. I made some relatively bearish comments about these two, and early in the session they were both showing decent gains. Obviously both were quite weak later on. XBI is sitting at the 52 week moving average, while XLV dropped modestly below it. XBI still has a green weekly candle but XLV’s is blue.

I won’t consider these as buy candidates until they show me something good. Something better than the higher low XBI made today, although that is a step in the right direction.

Conclusions

Seasonality is a positive here until May. Other than the notable exception of health care, the bulls seem to have the upper hand.

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