Stocks have managed to continue their move higher which has lifted almost all of the major index ETFs out of their oversold levels. Of the 14 index ETFs in our Trend Analyzer, only the Micro-Cap ETF (IWC) and Russell 2000 (IWM) are still oversold. IWC is also the furthest below its 50-DMA at 3.46% as of yesterday’s close. The Nasdaq 100 (QQQ) has surged 2.21% in the past week which has brought it to within 2bps of its 50-DMA. QQQ has seen the best performance in the past week, but other large-cap indices have also seen solid gains of more than 1%. Small and mid-caps on the other hand, although still positive, are underperforming.
While index ETFs have worked off their oversold readings, fixed income remains broadly overbought, but only a handful are more overbought than they were this time last week. Of the over 30 fixed income ETFs in our Trend Analyzer, only five are in neutral territory while the rest are overbought. Four of these that are overbought—mostly ETFs tracking longer-term bonds—are over 2 standard deviations above the 50-DMA. Despite fixed income largely being overbought, the two senior loan ETFs (BKLN and SNLN) are teetering on oversold levels and are the only two fixed-income ETFs below their 50-DMA. Finally, with investors beginning to come back to riskier assets, iBoxx High Yield (HYG) and Bloomberg High Yield (JNK) have moved back above their 50-DMAs. Start a two-week free trial to Bespoke Institutional to access our interactive trend analyzer and much more.