[PLUS] Weekly Momentum Report & Takeaways

May 2, 2021

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the context of the big picture and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

Procyclical Commodities led again this week.
- Copper was up over 3% and resolved higher from its short-term continuation pattern.
- Lumber had a monster week, gaining nearly 10% but is very extended with a daily momentum reading of 86.
The biggest loser of the week was S&P 500 Quality (-1.55%)
New highs continue to be abundant across all timeframes, particularly from risk assets like Stocks and Commodities.
72% of the assets on our macro list are within 5% of 52-week highs.
30% made new all-time highs over the week.
72% of the assets on our macro list are in bullish momentum regimes and 6% in extreme overbought range.

International ETF Universe:

Global Equities struggled this week as over 2/3rds of our list closed lower with a median return of -0.60%.
Turkey $TUR was this week’s big winner with a 5% gain. While one week doesn't make a trend, that's not a country that typically shows leadership in risk-off environments.
We had one bearish reversal this week from long-term laggard, Egypt $EGPT.
Colombia $GXG (-4.9%) and Chile $ECH (-6.9%) got hit hardest this week.
64% of the list is within 5% of their 52week highs, 38% made new 52-week highs over this past week.
Momentum remains strong as 85% of ETFs remain in a bullish regime.

US Sector Universe:

Overall, US sectors were mixed this week as just over half of our universe closed higher with a basically unchanged median return of +0.07%
The outlook remains strong from a structural perspective as every Sector Index on our list is in a bullish momentum regime.
New highs continue to be abundant across all timeframes, particularly from Large and Mid-Caps.
77% of the sectors are within 5% of their 52-week highs, and 51% made new all-time highs despite muted performance over the past week.
The biggest winner of the week was Equal Weight Energy $RYE which gained 5.10%
- Three of the Energy sector indexes bounced back from last week’s lows, making fresh monthly highs
- Only Small-Cap Energy $PSCE did not make the new short-term high, but it did gain 5%.
Equal-Weight and Large-Cap Real Estate hit extreme momentum readings this week, and are currently at 77 and 78, respectively.
We had just one bearish reversal this week, and it was from none other than everyone's favorite secular leader, Big Cap Technology $XLK.

US Industry ETF Universe:

As further evidence of the mixed week US stocks, just over 1/2 of our Industry ETFs closed higher with a median return of +0.10%.
- Just like our Sector list, the average subsector was basically unchanged.
On a positive note, 62% of industry groups made fresh short-term highs.
- New highs continue to significantly outnumber new lows across all timeframes.
The outlook remains strong from a structural perspective, as 91% of the industry ETFs on our list are in bullish momentum regimes.
· Oil & Gas Exploration & Production, Unconventional Oil & Gas and Natural Gas led the way this week.
- $XOP +5.69%, $FRAK +5.71%, and FCG +5.94%.
Our one bearish reversal this week came from a long-term laggard within the Tech sector.
- Multimedia & Networking $IGN tested its key pivot highs just beneath 70 before failing and closing the week down by over -3%.