Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
It’s Bear Hunting Season
In our monthly candlestick review, the primary theme was the long list of all-time highs. That’s never bearish. But when we looked toward the weaker areas, despite lagging behind, they’re all holding critical levels of support. When the bears can’t drag down even the worst areas, that’s information. Precious metals, energy, or in this case, airlines whipsawed below support, only for bulls to come out and reclaim control.
As illustrated here, we got about as strong of follow-through as the bulls could have wished for. Again, the fact that so many of the weakest areas just won’t break down is incredibly constructive. If bears can’t even take out airline stocks, how can they ever grab a hold of the broader market? You have to start somewhere, and right now they’re moving backward.
While it’s still too soon to draw this conclusion with enough conviction, we think that these whipsaw moves could very well be the spark that kicks off a fresh leg higher for markets. Not only do buyers have the ball back in their hands, but they’re starting to drive down the field.
