[PLUS] Weekly Momentum Report & Takeaways

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:

• Risk assets just bounced back strong following the weakness they've experienced so far in September
  • Because there are also defensive assets like precious metals and bonds in our universe, we only saw 51% of our list close higher with a median return of 0.02%. These stats aren't a great representation of what really took place this week though.
• The biggest development of all was the US 10-Year Yield $TNX breaking back above that key 1.40% zone.
  • TNX was the big winner this week, closing with more than a 6% gain and registering a fresh 4-week high in the process.
• In line with the risk-on tone this week, our biggest loser was the Volatility Index $VIX which fell -14.70%.

• The percentage of assets on our list within 5% of their 52-week highs jumped 4% (from 60% up to 64%).

• However, 45% of our list is still making new 4-week lows.

  • These are mostly defensive assets though.

• 38% of our macro universe closed lower than their last week's lows.

• We saw a bullish reversal move from High Beta $SPHB this week.

• Meanwhile, we saw a bearish reversal from the 20+ Year Treasury Bond ETF $TLT

• The number of assets on our macro list in bullish momentum regimes are still at year-to-date lows with a reading of 53%.

International Universe:

• International Equities experienced more pressure again this week, with 66% of our list closing lower with a median return of -0.43%.

• 46% of our international universe closed lower than their prior week's lows.

• Norway $ENOR was the leader and bucked the trend this week with a 2.13% gain.

• Turkey $TUR was this week's big loser, dropping by -5.84%.

• We saw bullish reversals from Israel $EIS, India $INDY, and Qatar $QAT this week as Emerging and Frontier Markets continue to hold up well beneath the surface.

• The percent of assets within 5% of their 52-week highs fell by another 5% this week and is now at 43%.

• Most of our list remains in a bullish momentum regime but these ETFs definitely endured some more damage this week as this figure fell another 9% and currently sits at just 57%.

• 100% of our international list saw new intra-week lows due to the selling pressure on Monday and Tuesday.

• 55% of the assets on our list posted new 4-week lows, while only 6% finished the week at 4-week highs. Here's a look at those new lows:

• We saw new all-time highs this week from Israel and India.
  

US Sector Universe:

• Our sector universe performance saw a positive rebound this week, as 68% of our list closed higher, with a median return of 0.58%.
• Equal-Weight Energy $RYE was the big winner for its second week in a row, closing out the week with a 4.24% gain.

• The biggest loser of the week was Large-Cap Real Estate which dropped -2.01%.

  • Again, notice the theme of cyclical groups outperforming and defensives underperforming.
• 30% of our sector list posted fresh 4-week lows.

• We saw a 6% gain in the percentage of assets on our list within 5% of their 52-week highs (from 47% to 53%).

  • Nice improvement, but still lots of work to do as this figure was in the mid-80s three weeks ago.

• Only 21% of our sector universe closed lower than their last week's lows.

• Like our international universe, 100% of our sector list made new intra-week lows early in the week.

• The outlook remains stable from a structural perspective as 64% of our list is in a bullish momentum regime.

US Industry Universe:

• Our Industry universe performance was positive this week, with 63% of our universe closing higher with a median return of 0.68%.

• For the second week in a row, the biggest winner was Unconventional Oil & Gas FRAK, which gained 7.30%.

  • We're seeing some very notable strength from Energy on all of our lists right now.

• The biggest loser of the week was Uranium $URA, which dropped -9.62% as this group gave back some of its recent gains.

• 28% of industry groups made fresh 4-week lows. Meanwhile, only 17% made fresh 4-week highs.

• We saw a ton of bullish reversals this week. Here they are:

  • Oil Refiners $CRAK, Natural Gas $FCG, Unconventional Oil & Gas $FRAK, Expanded Tech-Software $IGV, Aerospace & Defense $ITA, U.S. Transportation $IYT, Banks $KBE, Regional Banking $KRE, Media $PBS, Leisure & Entertainment $PEJ, Community Banks $QABA, Mortgage Real Estate $REM, Oil & Gas Exploration & Production $XOP and Pharmaceuticals $XPH.
  • Notice how most of these are cyclical groups... Somethings brewing in these areas right now.

• The percentage of our list in bullish momentum regimes saw little change this week, with a current reading of 61% (down 2% from last week).

• Only 39% of the assets on our industry list are within 5% of their 52-week highs.

That's it for this week's highlights!