From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts
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 in order to profit in the weeks and months ahead.
We continue to pound the table on leadership down the market-cap scale. There's been strong evidence over the past few weeks/months suggesting this is a structural trend reversal in the large vs small-cap ratio.
Many of you know that one of my favorite bullish setups is a stock making new all-time highs, with $100 per share within our sights. So many times stocks are attracted to that big round psychological number. It doesn't make any sense (like stocks rallying on the announcement of a stock split), but we don't care. It's something we've observed time and again and betting on a stock getting there is practically money in the bank.
While $100/share is typically where we see this behavior, the same principle holds when a stocks approaches $200, $300, $400, etc.
With this in mind, a stock mentioned in recent Under the Hood report is finally popping today and we're getting involved.
After drastic underperformance since March, one chart suggests that Gold could be setting up to outperform large-cap Indian stocks in the coming weeks and months.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
For months now, we've been pointing to the fact that metals are doing great. It's just that Gold isn't one of them.
Base metals are where the smart money has been flowing. Copper has been hitting the highest levels since 2013 and absolutely embarrassing the performance of its precious metals counterpart, Gold which has not been so golden.
Copper outperforming Gold is consistent with higher Interest Rates, and we've been getting those too.
More specific to Base Metals on an absolute basis, the positive correlation with Emerging Market Stocks is off the charts. Here is Iron Ore making new 7-year highs overlaid with the Emerging Markets Index so you can see how closely they trade together:
We had over 250 charts in our internal chartbook, but cut it down to about half of that so it's not a marathon to get through.
We cover breadth indicators from percent overbought/oversold to new highs and lows, A/D lines, and more. We do this for all the major averages as well as sector indexes.
After digging through all these charts, we'd be remiss not to share some of our favorites with you. We'll go over some in this post.
Here we go with another round of our Top-Down Take weekly post. At All Star Charts we like to keep things simple and look at the bigger picture. We let the charts speak to us and then decide what to do. Always remember, the Trend is our Friend.
Today we’ll take a popular pick – Bajaj Finance - and see what what the chart has to say at current levels.
It's that time of the year when shopping is on everyone's mind. I don't know about you, but my house has been under a mini panic as we scramble to make sure everyone's gifts are accounted for as he head into the final week before Christmas.
Clearly, this scene is playing out in households all across North America and it is being reflected in the share prices of online shopping venues.
I was going through the Global Fund Manager Survey this week and thought this one stood out the most.
Remember, this survey is loaded with all kinds of stuff. So there's something for everyone to cherry pick to fit their narrative.
But this one would catch my eye, regardless of my thoughts on the trend of the market.
We're looking at the percentage of investors who say they're overweight on cash at any given time, all the way back to 2001. But what it's really showing is that a net percentage of investors are actually underweight cash.