The major US indices managed to finish August on a higher note as each one experienced mean reversion last week. Except for the Micro-Cap ETF (IWC), each of the major index ETFs tracked in our Trend Analyzer worked off their oversold levels to finish the week in neutral territory. At the start of last week, small and mid-caps were actually over 2 standard deviations below their 50-DMAs. There is still not a single ETF that has managed to break above their 50-DMAs despite last week’s rally. The closest to its 50-day is the Dow (DIA) which outperformed last week rising over 3%. The Nasdaq (QQQ), while further below its moving average, similarly rose just under 3%.
Although the major indices finished the week higher, they also fell on Friday. These declines came as the indices entered the upper end of the past month’s range. As for the Dow (DIA), it was the only ETF to have significantly broken above this range. But at the same time, it also failed to retake its 50-DMA. It is a similar story for most other large cap indices like the S&P 500 (SPY) and S&P 100 (OEF) which also rejected resistance at both the upper end of the past month’s consolidation and their 50-DMAs. Small and midcaps, on the other hand, failed to break out of their short term downtrends after running into resistance at the high end of these channels. Start a two-week free trial to one of Bespoke’s premium equity market research offerings.