We mentioned yesterday that half of the major index ETFs were sitting at extremely oversold levels at the start of trading yesterday. Small gains helped to at least lift some of these ETFs off of these levels, but a sizeable gap lower at today’s open brought them right back—if not to a greater degree—into oversold territory. While every major index ETF is sitting on a loss over the past week, small and mid-caps have been handily underperforming. These also are all the ones that are still extremely oversold. The Core S&P Small-Cap ETF (IJR) has seen the worst of these declines down 3.8%. This has also tanked gains for the year as it now has the lowest YTD gain of the group. Start a two-week free trial to Bespoke Institutional to access our interactive economic indicators monitor and much more.
Peeking at commodities, similar to equities, oil has been taking it on the chin. Yesterday alone, in spite of supply data that would have indicated stronger prices, WTI crude futures fell just under 4.5% adding to its second straight week of declines; a total decline of 12.95% in that time. On these declines, Oil ETFs (USO and DBO) and the Energy fund (DBE) have all reached extreme oversold levels whereas they were neutral last week.
Conversely, precious metals ETFs have not been shaken by headlines of China raising tariffs on these commodities. The Precious Metals ETF (DBP) in addition to each of the gold ETFs (GLD, DGL, and IAU) have been some of the best performing commodity ETFs this week. The gold ETFs are hovering just under a half of a percent gain and DBP has seen a bit weaker performance gaining 0.23%. While these have been outperforming most commodities, the Agriculture Fund (DBA) has been doing so to an even greater degree with more than quadruple the gains of the next best performer, Gold Trust (IAU). This move has brought DBA towards the upper end of its long term and persistent downtrend channel. This also means DBA is just outside of overbought territory as well.