The surge for stocks yesterday in response to dovish ECB comments and potential progress on the trade front has lifted the major US large-cap index ETFs to overbought levels. The Dow and each of the ETFs tracking the S&P 500 (IVV, SPY, VOO) are now all overbought while the rest of the major index ETFs remain neutral. While these large-cap ETFs have moved into overbought range, they aren’t extended too far into extreme territory yet. A number of other ETFs like the Russell 1000 (IWB), the S&P 100 (OEF), and Total Stock Market ETF (VTI) are all teetering on becoming overbought. The movements to these levels have been pretty rapid over the past week as seen through the fairly large tails in the Trading Range section of our Trend Analyzer. For reference, the dot represents where each ETF is currently trading within its range, while the tail end represents where it was trading one week ago.
Looking at the individual industry group ETFs, like small caps, biotech ETFs have been handily outperforming. The Nasdaq Biotechnology ETF (IBB) has risen 4.81% in the past week while the S&P Biotech ETF (XBI) has surged even more with a 7.12% gain. A large portion of these gains have come in the past few days following Pfizer’s (PFE) announcement of an acquisition of Array BioPharma (ARRY). Now firmly neutral and above the 50-DMA, these two biotech ETFs were at or just above oversold levels only a week ago. Gold miners have also been performing well as GDXJ and GDX have both rallied nearly 5% in the past week. While this leads them to be fairly overbought (GDX just barely to an extreme), real estate has actually been running even hotter. Despite middling gains versus the rest of the industry group ETFs in the past week, the US Real Estate ETF (IYR) and REIT ETF (VNQ) are both the most overbought of the industries as has been the case for the past few days. Start a two-week free trial to Bespoke Institutional to access our entire suite of investment tools and all of our daily research.