As we enter a new trading week, every major US index ETF remains overbought as small caps continue to lead. The Micro-Cap (IWC) rose the most last week at +3.33%. The next best ETF in the group was the Russell 2000 (IWM) gaining 2.85%. On a year to date basis, these two ETFs have also been the best performers with the Russell 2000 having now risen over 18%. That sort of strength can be seen throughout with every ETF now up double digits on a year to date basis. Last week, both the Dow (DIA) and Russell Mid-Cap (IWR) finally moved out of their downtrends. While these two are still the only ones not in downtrends, with the group broadly seeing solid gains, there is a good chance DIA and IWR’s peers will start to show changing trends as well though this is not guaranteed. Again, each ETF is overbought with the price of some, like IWM, nearing 10% above their respective 50-DMA. At one point last week, the indices narrowly missed moving into extremely overbought territory. In other words, some sort of mean reversion is increasingly possible.
Taken from our Chart Scanner tool, below you can see the impressive run these ETFs have gone on so far this year. More recently, they are approaching the upper end of the range seen during the market volatility at the end of 2018. For each ETF in the group, the 50-DMA has begun to pick up as well.