Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Correlations Rise as Bear Extends its Grip

by September 23, 2022
September 23, 2022
Correlations Rise as Bear Extends its Grip

Despite the bear market environment, a handful of stock-based ETFs were showing leadership with bullish Trend Composite signals. Representatives from dirty energy (XLE), clean energy (TAN) and utilities (XLU) were covered over the last few weeks and this article is a follow-up. These ETFs remain with bullish Trend Composite signals, but they succumbed to broad market selling pressure as correlations continue to rise and the bear extends its grip. Leading stock-based ETFs are still part of the stock market and vulnerable to the bear.

The first chart shows the Energy SPDR (XLE), which was featured on September 9th. The Trend Composite turned bullish on July 29th and the ETF extended higher after this signal, even holding up as SPY reversed in the second half of August. XLE could not escape the gravitational pull of the bear market over the last eight days and fell sharply. Even though the Trend Composite is still bullish and XLE remains above the ATR Trailing Stop, it looks like a lower high formed from June to September (~61.8% retracement) and the ETF broke wedge support to signal a continuation of the June-July decline.

The next chart shows the Solar Energy ETF (TAN), which was featured on August 1st with a breakout. The Trend Composite turned positive just before this breakout and I set the intial ATR Trailing Stop near the June-July lows. TAN was holding up well two weeks ago, but fell sharply with the rest of the market and is nearing the ATR Trailing Stop. Whether bull or bear market, traders need to plan their trade and then trade that plan.

The final chart shows the Utilities SPDR (XLU) with some massive swings this year (+20%, -16%, +21%, -7%). The Trend Composite remains positive, but the swings are causing whipsaw signals. XLU is currently testing its ATR Trailing Stop (blue line), which was initially set to align with the July low. Note that my article on September 2nd showed that so-called defensive sectors are not immune to the bear. Typically, they just decline less.

Richard Russell of Dow Theory Letters (RIP) used do say that the winner in a bear market is the one who loses the least. TAN, XLE and XLU are holding up better than SPY year-to-date and over the last two months, but they are not immune to the bear as correlations rise. A bear market environment increases risk for all stock-related ETFs and the chance of picking winners is greatly reduced.

TrendInvestoPro remains very selective when it comes to stock-based ETFs because the Composite Breadth Model has been bearish since April 11th and the vast majority of ETFs are in downtrends. Our fucus is on non-stock ETFs, but even the pickings here are slim. Click here for immediate access to our reports, weekly video and ETF strategy.

StochClose, the Trend Composite, ATR Trailing Stop and eight other indicators are part of the TIP Indicator Edge Plugin for StockCharts ACP. Click here to learn more and take your analysis process to the next level.

—————————————

0
FacebookTwitterGoogle +Pinterest
previous post
The Anti-Russian Propaganda Campaign Kicks Into High Gear
next post
Exclusive: 10 FACTS on the Dozens of Federal Operatives Who Infiltrated the Trump Crowds on January 6th

You may also like

Thanksgiving Week is Historically Positive. Will This Year...

November 19, 2022

Using MACD to Pinpoint Reversals

December 15, 2022

TECHNOLOGY AGAIN PROVIDES ONLY SPARK FOR MARKETS

June 24, 2024

Surprise Negative Divergence on Nasdaq Advance-Decline Line

March 26, 2024

Recession Ahead? Sector Rotation Model Warns of Rising...

May 10, 2025

Think Really Hard About Who You Want On...

December 16, 2023

Plenty of Setups Emerge as Bulls Regain Control

September 2, 2023

The Hoax of Modern Finance – Part 5:...

January 26, 2024

Citi Predicts $3,000 Gold by 2025 — What...

July 12, 2024

Skepticism Over the OPEC + Oil Cuts

November 30, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • TSA tells Americans their Costco cards won’t fly at airport security despite love for hot dogs

      June 7, 2025
    • Trump announces China will restart rare earth mineral shipments to US after productive call

      June 7, 2025
    • Musk feud presents ‘unprecedented’ dynamic compared to past Trump disputes: expert

      June 7, 2025
    • Snub of Musk’s NASA nominee ally preceded sudden ‘big, beautiful bill’ criticism, Trump feud

      June 6, 2025
    • Supreme Court rules DOGE can access Social Security information

      June 6, 2025
    • US sanctions money laundering network aiding Iran as regime faces nuclear reprimand at IAEA

      June 6, 2025

    Categories

    • Business (8,149)
    • Investing (2,019)
    • Politics (15,558)
    • Stocks (3,134)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved