Even after huge rallies of nearly 2% for SPY and DIA yesterday and a gain of 3.5% for QQQ, every US index ETF that we track in our Trend Analyzer remains oversold. Given where futures are trading ahead of today’s open, things are set to get a lot more oversold at 9:30 AM ET.
While the overall picture has been less than optimistic, weakness in the major index ETFs focused on small to mid caps has been downright terrible. These ETFs have lagged behind the rest of the market considerably. At the current moment, each one of these names are down year-to-date and have entered into downtrends. With gains yesterday, some other ETFs such as the Core S&P Small-Cap (IJR) and the Russell (IWB) were able to move back to positive returns on the year, but with futures indicating a lower open today, this should not be expected to hold.
On a sector basis, Consumer Staples (XLP), Real Estate (XLRE), and Utilities (XLU) are the only ones to have thrived over the past week. XLP and XLRE are in oversold territory but are still down on the year. The Energy sector on the other hand (XLE) is down big this week at 7.19%. This month has not done any favors for the materials sector (XLB) either as it is now down big 14.35% YTD.