When Consumer Staples are underperforming, what type of environment are normally in?
Staples are making new multi-decade lows relative to the S&P500 and flirting with a catastrophic breakdown relative to Consumer Discretionary stocks: [Read more…]
Expert technical analysis of financial markets by JC Parets
by JC
When Consumer Staples are underperforming, what type of environment are normally in?
Staples are making new multi-decade lows relative to the S&P500 and flirting with a catastrophic breakdown relative to Consumer Discretionary stocks: [Read more…]
by JC
It’s Saturday Morning Chartoons time.
This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.
by Ian Culley
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Pockets of strength continue to emerge within commodities.
This could be hard for some to believe when we see things like energy chopping beneath overhead supply.
Or the fact that precious metals persist in slumming it as some of the worst-performing assets on the planet.
But this is a diverse asset class with plenty of bright spots that suggest strength and support our thesis of a new commodities supercycle.
We’ve recently covered breakouts in Sugar and Feeder Cattle that are both still in play.
Even some of the laggards, like Silver and Lumber, recently defended critical areas of support.
This week, it was impossible to miss the chart of Oat futures. Let’s have a look! [Read more…]
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
For the better part of 2021, we’ve been pounding the table about markets being a chop fest. And we’d seen little evidence suggesting this was likely to change any time soon–until this week, that is.
Trendless… range-bound… call it whatever you want, but the path of least resistance for stocks and many other risk assets has simply been sideways!
Alas, we’re seeing some strong bullish action this week that we simply can’t ignore. Let’s talk about it.
Before we get there, though, let’s take a step back and look at small- and micro-caps, as they provide great illustrations of this sloppy stock market story…
by JC
In the early days of Crypto, we were taught to believe these were currencies.
And in the case of Bitcoin, maybe it is. But when you go down the cap scale, these things are no different than stocks.
For me they’re “Tech” stocks. For Howard they’re “Software” stocks.
Either way, we agree that these are just more stocks we can trade. And if you choose not to, well then you’re leaving a lot of alpha on the table.
Why would you purposely choose to ignore this particular group of names?
Howard and I discussed all of this during a livestream this week.
Enjoy!
The ASC team published an Under the Hood report last week in which there were a bunch of interesting opportunities to choose from. But I held my fire — until now.
After letting these ideas marinate a bit, I’ve been liking the pullback and solid support holding in one of the names.
Let’s get right to it.
[Read more…]
by Ian Culley
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
As the rally in US Treasuries fizzles, we have to ask ourselves…
Where’s the alpha in the credit market?
It’s an important question, especially for those of us who maintain exposure to bonds.
And for those of us who don’t, it’s always good to know what’s going on in the fixed income space, as it’s often very valuable information.
Frankly, as investors, it’s irresponsible and negligent to not know what’s going on in this asset class.
It’s the largest market in the world!
And right now we’re seeing evidence of a shift in leadership toward High Yield Bonds $HYG.
We know it’s in our best interest to pay attention to this development so let’s look at a couple charts that suggest bond investors are reaching further out on the risk curve for a higher yield. [Read more…]
From the desk of Steve Strazza @sstrazza and Grant Hawkridge @granthawkridge
Whether more stocks are going up or down these days simply depends on where you look. Some advance-decline lines are moving higher, but others are moving lower.
Weakness and divergences in these indicators are more often than not resolved over time, but the longer they persist the more concerning they become.
This hasn’t been an issue for most of the major averages, as the S&P 500 and other large-cap indexes keep making new highs with confirmation from their A/D lines.
Yet when we look beneath the surface, and particularly down the cap scale, we’re seeing a different story. Ultimately, some stocks are going up, but most are not.
You’ve probably heard already, but the current environment is an absolute mess as the weight of the evidence continues to hang in the balance. In today’s post, we’ll discuss some charts that do a great job illustrating all the mixed signals out there right now.