Our Trend Analyzer continues to show weakness for equities after another volatile week last week. Every one of the major US Index ETFs remain oversold. While this is mostly the same as the start of last week, these ETFs are not as extremely oversold as they were. Even though this is a good sign, the Mid-Cap ETFs—IJH, IWR, and MDY—are still sitting lower YTD.
It’s important to note that on a 6-month time frame, five of the members of this group have recently broken their uptrends. Four are trending sideways and the Micro-Cap (IWC) is now in a downtrend. As it currently stands IWC is still positive for the year, but if this downtrend continues, it may not be long before it more closely resembles one of the mid-caps. This simply reflects the greater trend that we have seen over the past month of rotation out of smaller sized companies.