Bulls Take Lead Late In The 3rd
Here's the updated checklist:
And here's a time series showing the percentage of assets in bullish territory charted beneath the S&P 500. As previously mentioned, notice how we're back to the highest levels we've seen since introducing the list.
This tells us things are as good as they've been in months for the bulls. Whether or not they continue to improve - we'll just have to wait and see, but it sure seems like they're headed in the right direction.
As we've discussed, things keep coming together for risk assets. Here’s an example using a chart from our checklist that recently flipped in favor of the bulls. This is the All Country World Ex-US Index $VEU:
Since we last published this list back in August, VEU has reclaimed our risk level at its all-time highs from just prior to the financial crisis. The importance of this level can't be understated.
Long story short, the more and more upside resolutions we see, the more likely the other charts on the list are to follow.
And as more resolve higher, it should only be a matter of time before we find ourselves in an environment where stocks and commodities are enjoying a fresh leg higher.
But here’s one that’s still holding out. This is the US 10-Year Yield coiling beneath that key 1.40% level we've been harping on for so long now:
The bulls really want to see resistance at those former lows reclaimed... and soon. If we had to choose, we'd probably tell you this level in the 10-year is as important as any on our list.
As such, we're watching it like a hawk right now. It's hard to imagine risk assets are under much pressure in an environment where yields are back above our risk levels.
The bulls are probably running away with the game at that point.
We'll be sure to let you know as soon as it happens.
We hope you enjoyed this little update on our risk checklist.
As always, feel free to fire over any questions and we’ll address them.
All Star Charts Team.