Cracks in this bull market began to show up last week and the following BPI tables only underscore that trend. Two more major indexes turned the ball over to the defense. Both are S&P related so large-cap stocks are weakening. Watch the behavior of VUG and VTV with respect to SHY.
Index BPI: The two major indexes, NYSE and NASDAQ, continue to hold tough as both are still under the control of the offense. However, both experienced a decline in the number of bullish stocks. The two Dow indexes remained constant. We will continue to monitor the behavior of the NYSE, our primary index. When that one moves from X to O, we have an indicator some of the mid- and small-cap stocks are weakening. We should also see that in the ETF Ranking table as VBR, VOE, VBK, and VOT will all move below SHY in performance. Some are already there.
Sector BPI: Four more sectors shifted from offense to defense this week, energy being one. Discretionary, Financial, and Industrial all took big hits.
This is not a time to take a vacation from your portfolio. Pay attention to the risk reduction model you are using. Yesterday I set number TSLOs in the Newton portfolio as a means of protecting profits. Stay alert to the performance of all securities with respect to SHY, our “circuit breaker” ETF.