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What 5 Key ETFs Are Saying About the Market


The SPY has remained the strongest, but even it continues to struggle.

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I keep trying to step back and see something positive in the market. About all I got, though, is that it is springtime in Austin, Texas, and gorgeous outside. In the markets, I see the following.
iShares Russell 2000 Index (NYSEARCA:IWM): Small caps are still in a series of lower highs and lower lows. Additionally, I see a retest failure of the 50-day moving average from underneath. This is decidedly bearish as the beta-off trade continues.
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SPDR KBW Bank ETF (NYSEARCA:KBE): Banks just did a nice head-and-shoulders breakdown and should fall for a bit more.
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SPDR Series Trust (NYSEARCA:XTN): Transports are doing their best to hold in, but they did have a false breakout and they are flirting with the 50-day moving average.
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SPDR S&P Retail ETF (NYSEARCA:XRT): Retail looks like it will come below the 200-day moving average with the 50-day moving average and the 200-day moving average very close to each other. This could be really bad if they cross and confirm the beginning of a bearish trend.
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SPDR S&P 500 ETF Trust (NYSEARCA:SPY): It is holding out as best it can, trying to stay above near-term resistance. If it breaks, we could easily see the intermediate trendline get tested, which is another several percentage points away. We are also way overdue for a 200-day moving average test.
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All this being said, I am going to continue to reduce risk today and get my firm's portfolios down to about 50% cash by the end of the day. This is a pretty aggressive bearish posture, considering how we are still above the 50-day moving average.
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