The bulls are saying its global rotation, and the bears are saying it won’t work without US stocks.
Both takes make sense. But, they’re just takes.
Here’s where we are…
Stock markets around the world experienced fierce selloffs back in March.
Then in April, this bearish action was followed by some of the most historic rallies in recent history.
There was broad participation to the downside. And now we’re seeing the same in the opposite direction. We’re in the middle of a synchronized global rebound rally.
And every country, region, factor, sector, and industry group looks different. They all come with their own unique characteristics in terms of how much they sold off, how resilient they were, and now, how strong they are, measured by the bounce.
So, while some things obviously look better than others, and some groups still look pretty vulnerable… it all comes down to the retest.
There were plenty of hard and sloppy throwbacks to support, and there were other more textbook retests.
I prefer the prior. I always want a nice shakeout before my breakout.
Alibaba $BABA is a perfect example of the kind of retest I’m looking for in this tape. Here’s the chart zoomed all the way out to the prior-cycle highs:
BABA is the Amazon of China. It’s one of the no-brainer, blue-chip vehicles for making a bet on Chinese stocks, and more specifically on the Chinese consumer economy.
These online retailers are one of my favorite ways to express a bullish thesis on countries and regions around the world.
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