[Premium] Three Charts For The Week Ahead

JC Parets
July 5, 2021

We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

Last week we focused on Kospi 200, Growth vs. Value & QQEW.

Let's move into this week's topics.

1.  The first chart we're looking at is Nasdaq 100. Why are we looking at this chart? Not a big deal, just that the index crossed our earlier target of 14,540. After the sideways consolidation that we saw in the index, this is the resumption of the trend. But this resumption will depend on whether these new highs can be maintained. We're keeping a close eye on this one since our risk-on & -off indicators are currently tied for naught.

For now, the risk management level is extremely convenient, which is 14,540. A move below this, and we're happy to let go!

Click on chart to enlarge view.

2. The second chart we're looking at is Growth vs Value. This is an update on the chart we shared last week. What we saw was that the ratio managed to move past its overhead resistance and is currently holding above it. The Nadaq 100 moving past its resistance puts things in perspective now, doesn't it? After all, we can't talk about Growth and not include Tech in that conversation.

So is this where the market is headed? It's possible. But we'd like to see a confirmation on both Nasdaq 100 and this ratio. Consolidation above their respective levels will give us more clarity.

3. The third chart we're looking at is the custom-made Equally-weighted ASC Base Metals Index. Last week, we had a couple of commodities jump up at us and we saw the impact of that in this particular index. Notice how despite the metals not doing much for a while, the index continues to show strength. What you see is higher highs and higher lows.

This helps us understand the trend in the base metals. While the base metals aren't on a tear, their consolidation doesn't seem so bad when you see the trend in this chart!

In our view, these charts will help set the tone for this week and provide us information on how we should approach the market in the coming weeks.

Also, make sure to check out our other weekly post, "Trade Of The Week."

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team

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