This is the video recording of our September 3, 2021, All Star Charts Crypto Weekly Strategy Session.
[PLUS] Weekly Observations & One Chart for the Weekend
From the desk of Willie Delwiche.
[Crypto] Weekly Strategy Session – August 27, 2021
This is the video recording of our August 27, 2021, All Star Charts Crypto Weekly Strategy Session.
[PLUS] Weekly Town Hall Meeting w/ Willie Delwiche
This is the video recording of the August 26 Town Hall Meeting w/ Willie Delwiche
08/26/21 2PM ET [Read more…]
“I Understand How Hard This Game Is…”
From the desk of Willie Delwiche.
I’m not the biggest sports fan in the world.
This probably makes me a bit of an All Star Charts outlier. I don’t watch many games of any kind (especially during the regular season). Nor am I a good source for offseason updates or perspectives on roster moves and coaching changes…
But now’s a great time to be interested (even casually) in the Milwaukee sports scene. We had the Bucks winning the NBA championship earlier this summer. Now the Brewers have one of the best records in all of baseball and a division lead that’s approaching double-digits heading into the final month of the regular season.
I keep tabs on the Brewers the old-fashioned way–reading about them in the newspaper. This morning, I came across this quote from Kolten Wong, second baseman and leadoff hitter:
“You’re competing against pitchers who are throwing 100 (mph), command three or four pitches. Guys don’t really care if you’re in a slump at this level; they’re going to continue to bury you.”
That perspective transcends baseball. It’s a warning that applies directly to investing. The environment can be challenging, and the market can throw a lot at you. If you fall behind and press, it’s all too easy to get buried.
But Wong follows up with this wisdom:
“I just understand a lot more now. I understand how hard this game is. My outlook on the game is different. I’m just going out there and competing, trying to do whatever I can to have a good at-bat and the results will take care of itself.”
Even when the game gets messy, don’t press. Don’t try to mimic someone else’s process or wish for a different market. Neither of those “solutions” are going to lead to great outcomes.
Instead, maintain your discipline and stay focused on your process.
This may include taking some time to better understand the theories and principles you bring to your observations and actions. As Darwin said, “You cannot observe without a theory.”
Take what the market gives you and work with it. Turn theory into practice.
Is it a messy market right now? Absolutely… has been for months.
Is it difficult to stay focused on your plan and your approach? Yes. Now and always.
But when we understand what is under our control and stay focused, results follow.
The Brewers are proving it on the baseball diamond. We can see it in the market, too.
[PLUS] Weekly Sentiment Report
From the desk of Willie Delwiche.
Key Takeaway: It appears the bulls are preparing to pack it up and call it a day. Dark clouds are starting to roll in, as the slow deterioration beneath the surface has taken its toll. New highs and a relentless rally in the major indexes paint an alternate reality versus the experience of the average stock–a reality that hasn’t quite sparked the interest of the bears so much as it’s exhausted the bulls. Active investment managers continue to taper their exposure, and advisory services have turned their least bullish in more than a year. A storm is brewing in the form of a re-set in sentiment. As it inches closer, the question becomes more of “when” and “how,” not “if.”
Sentiment Report Chart of the Week: New lows in new highs
Indexes are making new highs, but beneath the surface the case for more caution on the part of investors makes more sense. There are many ways to describe the deterioration that’s been ongoing for months now. Here’s one more: For only the second time in the past two decades, the S&P 500 Index made a new high while more stocks on the NYSE+NASDAQ have been making new lows.
[PLUS] Dynamic Portfolio Management: Follow Crypto Strength
From the desk of Willie Delwiche.
As we’ve still yet to see a decisive shift to a risk-on environment, caution remains the general guiding principle for this market. At the same time, there are opportunities in crypto that we’d like to take advantage of.
In the Cyclical portfolio, we’re shifting domestic equity exposure from small-caps (IJR) to mid-caps (IJH). Small-caps have been stuck below a now-falling 50-day average for nearly two months, and our industry group rankings show small-cap groups losing relative strength versus both large-caps and mid-caps.
Two things to note in the Tactical Opportunity portfolio update – a change that is being made and one that is not being made. First, we’re putting some cash to work by adding a 5% position to Ethereum (ETHE). Breakouts are being seen across the crypto space, and we want to follow that strength. Second, we’re keeping our exposure to commodities (DBC) for now. We’re giving it the benefit of the doubt, as the longer-term up-trend remains intact.
[PLUS] Weekly Market Perspectives – Seeing EM Strength Beneath the Surface
Key Takeaways:
- Emerging Market indexes weighed down by weakness at top.
- Europe & Middle East showing leadership.
- If China is finding a bottom, broad EM strength could support a sustained rally.
Here in the US, a handful of mega-cap stocks are pushing the indexes to new highs, while beneath the surface many stocks are languishing. The NASDAQ Composite began this week by making a new all-time high, but it was the first time in eight days that there were actually more stocks making new highs than were making new lows. The S&P 500 is trading in record territory, while nearly 40% of its stocks aren’t even above their 50-day averages.
When we look overseas, what’s happening in Emerging Markets is the inverse of what we’re seeing within the US indexes. For EM, the weakness is at the top, in the countries that make up the largest weightings within the EM indexes. China accounts for more than a fifth of the weighting in EM indexes and is down nearly 15% over the past six weeks. India is the only country among the top six in the index that’s up over the past six weeks. Overall, EM has fallen 7% in that time period, moving into negative territory for the year and making new lows versus the rest of the world.
Most markets are holding up better than EM indexes would suggest. The median Emerging Market is down less than 1% over the past six weeks. During that same period, the median Developed Market is basically flat. For as weak as the Emerging Markets in the Asia-Pacific region have been, those in Europe and the Middle East have been even stronger. Seven of the top 11 markets (across EM and DM) over the past six weeks have been Emerging Markets in the EMEA region, which overall have a median return of 4.7%, the best within our regional breakdown across EM and DM. Our ACWI relative strength rankings help identify leadership trends by country. While we’re discussing negative divergences from a breadth perspective at home, we’re seeing positive breadth divergences in Emerging Markets. China has found a bid to begin the week. Strong EM breadth could provide it with a strong foundation on which to build a sustained rally.