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Tuesday, February 27, 2024

The Market’s Compass Developed Markets Nation ETF Examine


Welcome to this week’s publication of the Market’s Compass Developed Markets Nation (DMC) ETF Examine #475. As all the time it highlights the technical modifications of the 22 DM Nation ETFs that I observe on a weekly foundation and publish each third week, There are three ETF Research that embody the Market’s Compass US Index and Sector (USIS) ETF Examine, the Developed Markets Nation (DMC) ETF Examine and the Rising Markets Nation (EMC) ETF Examine. The three Research are usually printed each three weeks and despatched to paid subscriber’s electronic mail. There’s now a Weekly publication that’s despatched to paid subscribers each Sunday titled The Market’s Compass Crypto Candy Sixteen Examine that tracks the technical situation of sixteen of the bigger cap Cryptocurrencies that additionally makes use of (just like the ETF Research) an goal technical rating mannequin amongst different measures together with relative energy and my most popular technical evaluation instruments.

The Excel spreadsheet under signifies the weekly change within the goal Technical Rating (“TR”) of every particular person ETF. The technical rating or scoring system is a completely quantitative method that makes use of a number of technical concerns that embody however usually are not restricted to development, momentum, measurements of accumulation/distribution and relative energy. If a person ETFs technical situation improves the Technical Rating (“TR”) rises and conversely if the technical situation continues to deteriorate the “TR” falls. The “TR” of every particular person ETF ranges from 0 to 50. The first take-away from this unfold sheet needs to be the development of the person “TRs” both the continued enchancment or deterioration, in addition to a change in route. Secondarily a really low rating can sign an oversold situation and conversely a continued very excessive quantity may be considered as an overbought situation however with due warning, over offered situations can proceed at apace and overbought securities which have exhibited extraordinary momentum can simply change into extra overbought. A sustained development change must unfold within the particular person TR for it to be actionable.

On a WoW foundation the Whole Developed Markets ETF Rating (“TER”) fell -7.69% to 672 from 728 the earlier week. Six weeks in the past, the TER had risen to 824 for the week ending December twenty ninth which was the very best TER studying since January of final 12 months.

Six of the Developed Nation Market TRs we observe in these pages registered a achieve of their TRs on a WoW foundation, two have been unchanged and fourteen fell. As may be seen above on the finish of final week there have been seven ETFs within the “inexperienced zone” (35 to 50), 13 have been within the “blue zone” (15.5 to 34.5) and two have been within the “pink zone” (0-15). This was versus the week earlier than when there have been ten TRs within the “inexperienced zone”, eleven TRs within the “blue zone” and one was within the “pink zone” (0 to fifteen) which was the iShares MSCI Hong Kong Index Fund ETF (EWH). That was the fifth week in a row that the EWH was within the “pink zone” (see chart under with technical feedback). The Common TR lack of the 22 Developed Markets Nation ETFs final week was -2.54 vs. a mean achieve of +3.75 the week earlier than. The International X FTSE Norway 30 ETF entered the “pink zone” final week with the most important TR lack of the 22 with a pointy drop in TR to 11 from 32.

The iShares MSCI Hong Kong Index Fund ETF (EWH) has been in a gentle downtrend since January of final 12 months with all three transferring averages monitoring decrease. Except for a short restoration late final 12 months MACD displays the draw back value momentum because it istracking decrease once more under it sign line. Though there was a big measure of volatility the Technical Rating has been falling steadily, word the longer-term transferring common (blue line) in decrease panel. These technical options recommend it will folly to backside fish right now.

There are eight Technical Situation Elements (“TCFs”) that decide particular person TR scores (0-50). Every of those 8, ask goal technical questions (see the spreadsheet posted above). If a technical query is optimistic an extra level is added to the person TR. Conversely if the technical query is adverse, it receives a “0”. A number of TCFs carry extra weight than the others such because the Weekly Development Issue and the Weekly Momentum Think about compiling every particular person TR of every of the 22 ETFs. Due to that, the excel sheet above calculates every issue’s weekly studying as a share of the potential whole. For instance, there are 7 concerns (or questions) within the Each day Momentum Technical Situation Issue (“DMTCF”) of the 22 ETFs (or 7 X 22) for a potential vary of 0-154 if all 22 ETFs had fulfilled the DMTCF standards the studying can be 154 or 100%.

A 44.16% studying within the DMTCF was registered for the week ending February 2nd, or 68 out of 154 factors. In doing so, rising from an almost oversold studying of 16.23% or 25 two weeks earlier than.

As a affirmation software, if all eight TCFs enhance on every week over week foundation, extra of the 22 ETFs are enhancing internally on a technical foundation, confirming a broader market transfer increased (consider an advance/decline calculation). Conversely, if extra of the 22 TCFs fall on every week over week foundation, extra of the ETFs are deteriorating on a technical foundation confirming the broader market transfer decrease. Final week all eight TCFs misplaced floor producing a non-confirmation of final week’s +1.02% achieve within the iShares MSCI World ETF (URTH).

The Whole Technical ETF Rating (“TER”) Indicator is a complete of all 22 ETF rankings and may be checked out as a affirmation/divergence indicator in addition to an overbought oversold indicator. As a affirmation/divergence software: If the broader market as measured by the iShares MSCI World Index ETF (URTH) continues to rally and not using a commensurate transfer or increased transfer within the TER the continued rally within the URTH turns into more and more in jeopardy. Conversely, if the URTH continues to print decrease lows and there may be little change or a constructing enchancment within the TER a optimistic divergence is registered. That is, in a vogue, is sort of a conventional A/D Line. As an overbought/oversold indicator: The nearer the TER will get to the 1100 degree (all 22 ETFs having a TR of fifty) “issues can’t get significantly better technically” and a rising quantity particular person ETFs have change into “stretched” the extra of an opportunity of a pullback within the URTH. On the flip aspect the nearer to an excessive low “issues can’t get a lot worse technically” and a rising variety of ETFs are “washed out technically” an oversold rally or measurable low is near be in place. The 13-week exponential transferring common in Purple smooths the risky TER readings and analytically is a greater indicator of development.

Final week was the fourth week in a row that the URTH gained floor and set to problem potential resistance on the November 2021 excessive however there continues to be a budding non-confirmation of the restoration excessive by the DM Whole ETF Rating or “TER”. That stated it needs to be famous that the 13-week transferring common (pink line) has continued to trace increased. What will likely be seen later within the Weblog, lower than half of the twenty-two ETF we observe gained floor on an absolute foundation final week.

The Common Technical Rating of the 22 Developed Markets Nation ETFs

The Weekly Common DM Technical Rating (“ATR”) is the typical of the person Technical Rankings of the 22 Developed Markets Nation ETFs we observe. Just like the TER, it’s a affirmation/divergence or overbought/oversold indicator.

Two weeks in the past, the URTH traded and closed above the Higher Warning Line (pink dashed line) of the Schiff Modified Pitchfork that had capped the continuation of the rally for six weeks and final week the rally adopted via to the upside however the DM Common Technical Rating has not confirmed the transfer increased. The longer-term transferring common (blue line) of the indicator continues to trace increased however the shorter-term transferring common (pink line) has began to roll over and has capped the indicator for the previous 4 weeks. I would want to see the Common DM Technical Rating transfer above the 9-period ma to substantiate the endurance of the rally from the gold P3 value pivot low. Extra on the Brief-Time period Technical Situation of the URTH however first…

*Doesn’t embody potential dividends

Eight Developed Markets Nation ETFs gained floor on an absolute foundation final week, 13 misplaced floor and one was unchanged, leading to a mean absolute lack of -0.35% versus the earlier week that registered a mean absolute achieve of +1.52%. Solely 4 ETFs outperformed the 1.02% achieve within the URTH and eighteen underperformed the achieve within the iShares MSCI World ETF.

There was a gentle grind increased within the URTH for the 13 buying and selling classes after the sideways to decrease corrective value sample from Violet P2 to the worth pivot at Violet P3 however regardless of the transfer increased since then costs have remained trapped between the Decrease Parallel (strong violet line) and the Median Line (violet dotted line) of the Schiff Modified Pitchfork (violet P1 via P3). MACD is again above its sign line however is just monitoring barely increased, however the momentum oscillator does stay in optimistic territory. Because the finish of January, the DM Nation ETF Each day Momentum / Breadth Oscillator has been anemic however has managed to carry transferring common help.

*Doesn’t together with dividends

The EWJ, EDEN and SPY proceed to be the one three DM Nation ETF’s which can be up relative to the YTD +2.58% achieve within the URTH.

Charts are courtesy of Optuma. Any time sequence knowledge may be imported, charted, and examined in Optuma.

To obtain a 30-day trial of Optuma charting software program go to…

www.optuma.com/TMC.

A 3 half tutorial sequence on Andrews Pitchfork could also be learn at my site…. www.themarketscompass.com

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