Although major equity indices managed a modest rebound yesterday, they all still sit over 4% lower versus last week.  The Micro-Cap (IWC) has seen even worse declines in this time with a decline of 6.52%. IWC is also the only major index ETF in extreme oversold territory and in a downtrend over the past six months. While the Russell 2000 (IWM) is also oversold, the rest of the ETFs have actually moved into neutral territory following yesterday’s gains.  But keep in mind the fact that one week ago, all of these ETFs were overbought across the board.

While risk assets have gotten hit hard, fixed income has been surging.  So much so that of the 31 fixed-income ETFs in our Trend Analyzer, 15 are now over 2 standard deviations above the 50-DMA. Medium to long term treasury ETFs tracking the 3-7 year (IEI), 7-10 year (IEF), 10-20 year (TLH), 20+ year (TLT), and the Extended Duration Treasury (EDV) are all even more extended at over 3 standard deviations above the mean. These have also gained the most in the past week with EDV seeing the largest gains at 8.1%.  Meanwhile, high yield credit has declined. The Bloomberg High Yield Bond ETF (JNK) and iBoxx High Yield Bond ETF (HYG) have fallen 1.43% and 1.36%, respectively. Senior loans (SNLN) and Preferred Stock (PFF) have also fallen. Start a two-week free trial to Bespoke Institutional to access our interactive Trend Analyzer and much more.

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