Along with Tech stocks and other momentum names that have been falling, gold has also taken a beating lately. As shown below, over the last week, GLD has actually been the worst performer across a large basket of asset class ETFs, including bitcoin (IBIT).
On the flip side, the dividend stock ETF (DVY) has been the best performer; a good example of the defensive shift.
Below is a snapshot of sector ETFs from our Trend Analyzer tool that is another helpful way to see the recent market rotation:
After rallying for weeks on end after the March lows, the S&P 500 ETF (SPY) saw one last surge at the end of May to leave it at all-time highs on June 2nd.
As shown below, SPY is now down 4.5% from those highs, and yesterday we saw the first support level break. We’d note that we saw a similar “last gasp” surge in the second half of October that was quickly reversed in early November with a 5.1% drop that also saw a support level break (just barely). Following that 5% pullback, SPY managed to bounce back, but then it went range-bound for months before ultimately rolling over when the Iran War began.
As experienced investors know, markets can’t go up in a straight line forever. Given the huge rally seen since March, we’re prepared for a period of consolidation at a minimum here.
The Nasdaq 100 (QQQ) is down 7% from its highs, which looks similar to the 7.9% drop we saw last October. Similar to SPY, the Nasdaq 100 bounced back after that 7.9% drop, but then it went sideways for a few months rather than racing right back to new highs.
Gold (GLD) fell 4% yesterday to close at fresh 2026 lows. On a closing basis, GLD is now in a bear market with a 24% drawdown from its all-time closing high made on January 29th.
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