ETF Watch List

Here’s a LIST of the 27 ETF’s I follow on a weekly basis. The ETF is listed at the top in bold followed below by the top 15 weighted holdings in each one. If green, then it’s bullish. This means the 8 EMA, 13 EMA, 21 EMA, and 34 EMA are positively stacked (i.e. 8 over 13 over 21 over 34). If red, then it’s bearish. This means the 8 EMA, 13 EMA, 21 EMA, and 34 EMA are negatively stacked (i.e. 8 under 13 under 21 under 34). If no color, then it’s neutral. The EMAs are not stacked either positively or negatively. If you are a long only trader, then it’s best to look for pullback buys when green. Avoid the neutral and bearish stocks. If you are a two way trader, then you can also look for pullback sells when red. The trend is you friend!

This upcoming week’s observations are:

  • 10 ETF’s are bullish, 5 are bearish, and 12 are neutral
  • The most bearish sectors are IYT (9), JETS (8), OIH (13), and XLE (8)
  • The most bullish sectors are CLOU (9), QQQ (10), SPY (10), XLK (9), XLV (9), and XRT (10)

Grayscale Bitcoin Trust (GBTC) To Test All-Time Highs?

For anyone looking for some exposure to Bitcoin without buying Bitcoin itself can look to the Grayscale Bitcoin Trust (GBTC).  For more information, please check out this link.

This market, from it’s 2-19-21 all-time high to its 6-22-21 most recent low, corrected 59%.  During this period, GBTC was in a downtrend from a daily time frame perspective.  However, since that 6-22-21 low it is showing signs of an upwards turnaround.  First, it formed a bullish double bottom pattern that was triggered on 7-26-21.  Second, it broke the bearish pattern of lower highs and lower lows on the same day the double bottom pattern became active.  Third, it formed a bullish ABCD pattern today.  This pattern is bullish because it has a super shallow retracement (less than 38.20%) plus it has positive momentum because of the 6:1 skewing (6 bars down, 1 bar up).

Now that we have the signs of a potential trend change, where can we go from here, and where can we run into resistance?  Let’s look at the targets first.  The double bottom objective is ~ 38.52 and the ABCD pattern’s objective is a range from 41.78 to 43.16.  Now let’s look at the obstacles in the way of these upside targets. We have the 100 DMA ~ 37.49, the monthly R1 @ 38.82, and a change in polarity (old support becomes new resistance) between 37.88 and 40.67.  The double bottom target sits in the bottom of this potential resistance range.  But the ABCD target sits further above.  I think we could see the double bottom target reached, then see prices stall inside the resistance zone, and then fall back to retest the ABCD breakout level of 35.50 before moving back higher.  Once the change of polarity zone has been breached, then a move to the ABCD pattern’s objective seems likely. 

The final potential resistance to keep GBTC from all time highs will be two significant volume @ price clusters.  These clusters show the 2 heaviest traded volume profiles since the all-time high down to the recent lows.  The only larger one is the one that was just recently created below current price action.  These two upper resistance clusters are between 44.31-47.41 and 48.93-51.71.  If price action can clear these two zones, then new all-time highs should come soon afterwards.

GBTC

Mexican Peso: Bullish Breakout (Revision 3)

There is a potential bullish ABCD pattern, which closely resembles a flag pattern, developing in the Mexican Peso. This pattern is bullish because of the retracement, which is less than 50%. Anything less than 50% is bullish.  The trigger to this pattern is a break above .05025 before going below .04901. If prices can trigger this pattern by August 2nd, then we would have right-handed skewing as well. The skewing shows the momentum, which in this case would be strong. Weak momentum would be skewed to the left (i.e., less bars down to the swing low, and more bars to the breakout high).  The next step is to watch how price moves towards and above the breakout level on a smaller time frame (i.e. 240 min).  So far there are 2 ABCD patterns on this time frame.  Both have deeper than 50% retracements, which signals a weak up trend.  So we have some conflicting signals between the daily and intraday time frames.  These breakout patterns work best when both time frames are in sync.  However, the daily time frame does carry more weight.  Therefore, I anticipate a breakout on the daily time frame that could stall near recent highs (0.05074 to 0.05100).  Then I expect a pullback back to or slightly below the breakout area.  This could offer a nice entry because there is a volume at price cluster developing as price action has been in potential accumulation mode the past few weeks.

Set-up 1:

Buy the breakout at 0.05026, with stops at 0.04900 for a risk of 630.00/futures contract.  The target of this ABCD pattern would be 0.05156 for a reward of 650.00/futures contract.

Set-up 2:

Don’t buy the breakout.  Instead, wait for a potential pullback into the volume at price cluster.  This will lower your risk and increase your reward to risk ratio.  I will give more details on this trade in a follow-up post.  The stop and target would still be the same.

Lastly, we do have some possible upside obstacles that could serve as potential scale out levels before reaching the target zone. The first is between 0.05074 and 0.05100. This zone contains the swing highs from 12-9-20, 1-21-21, and 6-9-21. The next possible scale out would be 0.05123, which is July’s monthly R1 pivot.

Stay tuned for more analysis on this potential breakout.

Russell 2000 In Consolidation?

The Russell 2000 futures has been range bound for the past 6 months, as shown on its continuation chart. This range between 2366.00 on the high to 2084.40 on the low looks to be in consolidation.  The interesting thing is the large volume at price cluster that's developing between 2299.00 and 2199.00.  This cluster is currently the largest dating back to its March 2020 bottom.  Once prices break outside of this range, I expect this large volume cluster to serve as an import level of either support or resistance.  Let price action dictate the breakout direction and then look to enter positions on pullbacks into the volume cluster.

If we break below 2084.40 with a nice bearish candle, then I would look to short any pullbacks into the volume cluster.  If we break above 2366.00, then I would look to go long any pullbacks into the volume cluster.

I will be watching this market closely and will provide updates when warranted.

russell 2000

Mexican Peso: Possible Bullish Breakout (revision 1)

There is a potential bullish ABCD pattern, which closely resembles a flag pattern, developing in the Mexican Peso. This pattern is bullish because of the retracement, which is less than 50%. Anything less than 50% is bullish.  The trigger to this pattern is a break above .05025 before going below .04919. If prices can trigger this pattern before July 20th, then we would have right-handed skewing as well. The skewing shows the momentum, which in this case would be semi-strong. Weak momentum would be skewed to the left (i.e., less bars down to the swing low, and more bars to the breakout high).  The next step is to watch how price moves towards and above the breakout level on a smaller time frame (i.e. 240 min).  So far there are 2 ABCD patterns on this time frame.  Both have deeper than 50% retracements, which signals a weak up trend.  So we have some conflicting signals between the daily and intraday time frames.  These breakout patterns work best when both time frames are in sync.  However, the daily time frame does carry more weight.  Therefore, I anticipate a breakout on the daily time frame that will stall near recent highs (0.05074 to 0.05100).  Then I expect a pullback back below the breakout area.  This could offer a nice entry because there is a volume at price cluster developing as price action has been in potential accumulation mode the past few weeks.

Set-up 1:

Buy the breakout at 0.05026, with stops at 0.04918 for a risk of 540.00/futures contract.  The target of this ABCD pattern would be 0.05174 for a reward of 740.00/futures contract.

Set-up 2:

Don't buy the breakout.  Instead, wait for a potential pullback into the volume at price cluster.  This will lower your risk and increase your reward to risk ratio.  I will give more details on this trade in a follow-up post.  The stop and target would still be the same.

Lastly, we do have some possible upside obstacles that could serve as potential scale out levels before reaching the target zone. The first is between 0.05074 and 0.05100. This zone contains the swing highs from 12-9-20, 1-21-21, and 6-9-21. The next possible scale out would be 0.05123, which is July’s monthly R1 pivot.

Stay tuned for more analysis on this potential breakout.

mpeso