Think Big: Bear Heaven Is Watching The ETFs Crumble
2022.04.25 12:05
I have barely had any time to go through the absolute of wonderfulness from Friday’s plunge, but I at least made my way through the ETF charts, and my jaw is hanging open.
For one thing, the interest-sensitive leaders—high yield via iShares iBoxx $ High Yield Corporate Bond ETF (NYSE:HYG), junk bonds via SPDR® Bloomberg High Yield Bond ETF (NYSE:JNK), corporate bonds via PIMCO 0-5 Year High Yield Corporate Bond Index Exchange-Traded Fund (NYSE:HYS)—that are going to lead equities into the fiery pits of hell are not even bothering to have even a tiny bounce-back.
They are simply crumbling to new lows.
HYG Chart
I was originally going to mark up these charts with plunging arrows, but I’ll leave it to your imagination and just say a few words about each one.
Below are iShares MSCI Emerging Markets ETF (NYSE:EEM), which have been in a bear market for way more than a year (unlike, oh, let’s say, our own idiotic U.S. stocks, which haven’t woken up to smell the coffee yet).
The next step here is to cut through that major supporting trendline and make its way to the next Fibonacci retracement level just above 36.
EEM Chart
The worldwide equities via iShares MSCI EAFE ETF (NYSE:EFA) are absolutely poised to plunge, and the next logical move here would be to slice through the lows of 2022 and make their toward 58.
EFA Chart
I don’t have a specific target in mind for small-caps via iShares Russell 2000 ETF (NYSE:IWM), even short-term, but if we break 2022 lows, all holy hell is going to break loose, because it’s as clear as a mountain lake that this is a very range-bound creature, and a failure of that range will cause a no-bid-gasm.
IWM Chart
Although it’s almost tick-for-tick the same as EFA, the fund iShares Core MSCI EAFE ETF (NYSE:IEFA) sports a sensational rounded top and a target price just above 59.
IEFA Chart
And tech—Invesco Invesco QQQ Trust (NASDAQ:QQQ)—good Lord!!—there’s a certain special someone I think is going to gently place an anchor around the neck of this beast and batter it down to about 250.
QQQ Chart
The SPDR® S&P 500 (NYSE:SPY) is an absolute freak, thanks to the Fed’s ceaseless attempts to prop it up. That’s why it’s so hard to read and lacks the smoothness of other funds.
All the same, that thick blue line is key support, and a genuine failure thereof would set us on a course to about 375.
SPY Chart
In sharp contrast to the freakishly distorted SPY, the industrial Industrial Select Sector SPDR® Fund (NYSE:XLI) is a thing of unparalleled beauty.
XLI Chart
Of course, I’m not in any ETFs at all right now. Instead, it’s all individual stuff, because, again, unlike the shamelessly-manipulated SPY, items like Lennox International (NYSE:LII) are left to behave in an organic fashion, yielding shapely, sensuous curves that cause tremendous arousal in bloodthirsty bears like myself.
LII Chart
This sums it up best:
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