Seven Key Funds

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Last week was very important to U.S. equity charts, and I have selected from my ETF watch list a collection of seven in particular whose patterns merit close watching next week.

The first is emerging markets, which have completed a small but well-defined reversal pattern. Take note how prices have broken the year-long channel and that a move below the horizontal line will complete the pattern.

slopechart EEM

Miners have completed an enormous right triangle pattern, and I think precious metals awfulness is going to simply continue. Sure, it may have a bounce up to that triangle base once more, but whether it does or not, I think substantially lower prices are in store.

slopechart GDX

Gold may also bounce, and perhaps even more robustly, since it is a fair distance from its own triangle base. As with miners, however, I think the lower pathway is the clearest.

slopechart GLD

Interest-sensitive instruments have been relatively tumultuous in recent weeks. The corporate bond ETF did a perfect touch of its trendline (twice, in fact) and is poised for a small recovery. The downtrend should continue, however.

slopechart LQD

The cleanest pattern, by far, has been NASDAQ, and the picture-perfect head & shoulders pattern completed this week with magnificent results. I suspect support will be available at the lower trendline shown.

slopechart QQQ

Arm-in-arm with NASDAQ is the semiconductor index, which has broken beneath its ascending price channel and has completed its own clean topping pattern. This price failure is a core reason I believe the tide is finally turning, since this sector has been such a stalwart holdout.

slopechart SMH

Lastly is the Dow Utilities, which has broken through three different uptrends. Utilities are, for most folks, so boring as to not even pay attention, but prior bear markets have all been preceded by a shift downward by the utility stocks, and this subtle breakdown is another clue for us.

slopechart XLU