There are times to make money in the market and then there are times to keep your money.
In sports you play offense and you play defense.
Offense sells tickets, but defense wins championships.
That’s how I learned it. [Read more…]
Expert technical analysis of financial markets by JC Parets
by JC
There are times to make money in the market and then there are times to keep your money.
In sports you play offense and you play defense.
Offense sells tickets, but defense wins championships.
That’s how I learned it. [Read more…]
by JC
This is what corrections look like.
When Consumer Staples bottomed out on March 1st relative to the rest of the market, that was one of the first signs of defensive rotation.
At the time, we chalked it up as just one signal, of many that we monitor.
But as the month has progressed, the soldiers continue to fall.
Aussie/Yen has rolled over and we’re even getting a bid in US Treasury Bonds: [Read more…]
We’ve seen quite a move lower in $TLT (which moves inversely to interest rates) since this summer.
Is the bottom in?
My crystal balls says: “Don’t ask me stupid questions.” So, that’s no help.
But here’s what I know:
The bet I’m making is $TLT is going to chop around in a bit of a range over the next 2-6 weeks and this will cause volatility to contract.
So here’s how I’m going to play it:
by Louis Sykes
From the desk of Steve Strazza @sstrazza
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
We continue to reiterate the same themes and pillars that support our bullish macro thesis. This would include an abundance of evidence pointing to risk appetite, rising developed market yields, strength from commodities, and of course the ongoing rotation toward cyclicals, value, and international stocks, among others…
Just about anywhere we look, we’re seeing investors gravitate further and further out on the risk spectrum.
At the same time, some of the former market leaders have retreated since February and are currently hovering near key levels. Similarly, even the markets’ more recent leaders have shown signs of weakness the past few weeks as some have violated critical tactical levels while others are consolidating at logical levels of resistance.
We’re seeing this both in the US and abroad… and not just in Equity Markets, but also Credit and Commodities. Even many of the risk-on FX pairs we watch have rallied back to key former highs, a very natural area to see sellers step in.
In this week’s report, we highlight some of the most important charts and corresponding levels we’re currently focused on. As long as our risk levels remain intact, so does our “bullish risk-assets” thesis. On the other hand, if we start to see more and more of these key levels give out, we’ll have to re-evaluate things.
by JC
Bear Markets are environments where a majority of stocks are falling in price for a prolonged period of time.
Sometimes you’ll hear lies about a 20% decline defining such things, but that’s just bullshit.
The number 20 is a completely arbitrary number that has absolutely no meaning. Thinking it does is foolish. Why 20? Why not 19.5? or 20.2?
There is no reason. They’re just lies.
If you ever hear anyone say that, “A bear market is when it falls 20%”, you know it’s because they’re in the entertainment business, not in the truth business.
Stay away from those kinds of people. They’re not here to help.
It’s their job to distract, it’s our job to ignore.
In reality, expansions in the new low lists are things you’ll find near the beginning of market declines. You’ll see spikes in these lists that haven’t been seen in years.
Here’s what this looks like coming into the week. It’s still a ghost town: [Read more…]
by JC
We don’t need to make a whole thing about it. But I did just want to take a moment to thank everyone for the last 10 years.
I wrote my first blog post on this site in March of 2011. That was 10 years ago this month.
It’s been a pretty unbelievable ride ever since.
I don’t even know where to start. Hopefully one day I can write a book about it and tell you the whole story.
There are so many people to thank that we’d be here forever. [Read more…]
by Louis Sykes
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
The same strong rotational currents that have been in place in the US since last summer have finally begun to spill over to International stocks… but, not all of them.
For the first time in about a decade, evidence suggests that stock markets around the world have finally built a strong foundation relative to their US counterparts, and might just be ready for a sustained period of outperformance.
How big the move will be and how long it will last are always some of the most difficult variables to predict. We can merely position ourselves accordingly based on the information we do have, and then be keenly aware of new data points as they come in, and constantly re-evaluate and adjust our outlook as appropriate.
As for the potential structural bull-to-bear reversal in the long-running trend of outperformance from US stocks… the seeds have definitely been planted for such a development to occur.
Now, we can only sit back and wait to see if those seeds blossom into something real or if they’re duds – in which case the recent price action in favor of International stocks will likely unwind and end up being just another dead-cat bounce.
In this post, we’ll run through some of the things we’re currently keeping a close eye on for an early indication as to whether these recent changes in the global landscape are likely to have some real staying power this time around.
by JC
In the latest episode of The Money Game, Phil and I talk about the old cliché, ‘Everything happens for a reason’.
It’s funny because it doesn’t. Not everything happens for a reason. What’s the reason?
It’s hard for humans to accept the element of randomness. Sure, good things can happen after a tough breakup or losing your job. Like you can meet your future wife or start a successful business, all after what seemed like a negative event in your life. But connecting the 2 dots is silly.
Now, it’s perfectly natural for us as humans to want to do that, but it doesn’t make it right.
We inherently want to learn, and how I see, the best ways to learn are from experiences. Some of the most important lessons I’ve learned came the hard way, for sure. And I can think back to those moments and I’m now thankful for them. But they certainly didn’t happen specifically so I could use that information to my advantage today. They were just events that happened, that fortunately I learned from.
I think to believe that everything does happen for a reason makes you incredibly self-centered. You are a tiny spec of nothing in this massive spinning universe. To think that events all around you are happening for your benefit, or for some made up destiny of yours, seems irresponsible.
Good things happen all the time in bad scenarios. Bad things can also come as a consequence of positive events. For example, the global pandemic was horrible. Many people died, businesses were shut down and so many people have suffered, particularly mentally. BUT, in many cases, families have gotten closer together, a lot of people have gotten in better shape, with more time on their hands to exercise. Many of my friends are thriving in this environment.
That’s life. Things happen. It doesn’t have to be for a reason.
So what’s the prescription? Phil says to just live your life. Be a good person. Enjoy yourself.
We’re here. So let’s make the best of it!
[Read more…]