If you haven't heard by now, the Online Retail Index broke out to new all-time highs. We're not exactly seeing that from a broad-based perspective. This is not happening domestically and it's certainly not happening around the world. The rotation we're seeing among sectors and industry groups is real. Today we're going to focus specifically on online retail.

The way I see it, the question here is simple. Is the massive reversion, and return to these prior highs, "the" move? Or was that just a multi-year consolidation, and the move is just getting started?

Here's what that looks like:

Click on Charts to Zoom In

Now look at this group of retailers relative to the S&P500, which happens to be one of the strongest stock indexes on planet earth. So we're comparing it to strength, not cherry picking weak indexes:

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The weight of the evidence remains mixed and suggests that there will be winners on the long side, winners on the short side, and a lot of stocks in the middle that aren't going anywhere.

An easy way to view that is through our five bull market barometers, which continue to suggest we're in a bear market. As a result, we're focused on the best opportunities on both the long and short side.

In this post, we're going to outline which area of the market we're looking to short and add several individual stock trade setups to our list of open ideas.

Let's start at the sector level. Nifty Commodities remain below the 38.2% Fibonacci Retracement of its 2020 decline at 2,635. With momentum in a bearish range and stuck below this level, then it makes sense to be erring on the short side and looking for a move back towards the lows near 2,075

Click on chart to enlarge view. ...

Jordan Kotick is one of the key people that early in my career inspired me to be more intermarket oriented. They would ask Jordan about the S&P500 and he would go into a tangent about bonds. They would ask him about Emerging Markets and he'd whip out, what he refers to as, "Chinese Dow Theory". For over a decade, Jordan was the Managing Director of Macro Strategy at Barclays and then Managing Director of Cross Asset Strategy at RBC Capital Markets. He is the first person to have ever been president of both the CMT Association (then called the MTA), and the Canadian Society of Technical Analysts (CSTA). In this podcast episode we talk about some of the great lessons Jordan learned over the years and what sorts of markets and charts investors should be paying attention to in the current environment. This was a really fun conversation and was great to catch up!

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 8, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Many of the relative trends in stocks that have been in place for a long time have come into question recently as they're showing signs of maturing due in part to the change in leadership we wrote about this week.

In this post, we'll highlight two structural intermarket themes that have remained robust throughout this tumultuous time for equity markets.

The first relative trend that hasn't slowed down at all is the relentless outperformance of the US over the rest of the world. Our first table shows the Wilshire 5000 (DWC) dominating every Global Index over just about every timeframe, from this week to the trailing year.

Click table to enlarge view.

The second theme is the continuance of...

If you know me by now, you know how much I enjoy all things Japanese. For me, it's the best cuisine on earth. The architecture in Japan is spectacular. I can't take the smile off my face whenever I'm there. If you can believe this, I even passed the Japanese Sake Advisor Exam earlier this year.

There's a blog post I've been working on for a while I titled, "Investing Like a Sumo Wrestler". But that's a conversation for another day.

This week I was watching the new documentary, "The Delicacy", about sea urchins and the divers who harvest them. Uni, which is what the Japanese call the edible part inside the sea urchins, is one of my favorite snacks in the world. You can get good ones from Hokkaido, Santa Barbara and off the coast of South America.

The documentary was awesome, even if you don't like to eat Uni, like my wife. She also loves visiting Japan, but she'll tell you she prefers Italy or Greece. I'm torn.

Anyway, watching this while having a glass of Junmai Daigingo sake, they brought up the concept of Ichigo Ichie. This is a philosophy that I learned about while...

The headline you'll hear is that unemployment rates are soaring to unprecedented levels. What I always like to point out is that stocks crashed months ago, collectively factoring in just that. Stocks are a discounting mechanism. It's more obvious today than ever, and I think this is a nice reminder. 

For the past week or so, it's been a feeling to me that markets are setting up for some sideways chop with any directional bias being to the downside from here.

Meanwhile, options volatilities still remain elevated across the board (though well off the March highs) reflecting a lingering fear among market participants of another shoe to drop as the Coronavirus scare continues to effect human health and the global economy.

Against this backdrop, I'm looking for some delta-neutral credit spread strategies to employ. When doing so, I like to scan the most liquid ETFs and look for the ones exhibiting the highest premiums.

With Chart Summit India now almost a month in the rearview, I finally found some time to go back and rewatch some of the presentations.

Together with our partners, we hosted 20 amazing speakers and thousands of attendees and raised a remarkable amount of money to fight the COVID-19 pandemic. It was a really great event and an honor to be a part of.

With over 10 hours of content from some of the market's top technicians, I won't be able to do them all justice in just a short blog post so I highly encourage you to go watch all the full presentations for yourself. They can be accessed for free here.

With that said I'll try and do my best. Bruni recently wrote a post about some of his main takeaways from the conference which you can read here. I'm going to build on that today and share some of the things I found valuable from the handful of presentations I recently went back and watched.

When the picture isn't clear on the timeframe you're trading, it generally helps to zoom out one, or even two timeframes above it to gain some clarity around the primary trend.

Today we're going to compare and contrast the action in Gold/Silver and Natural Gas/Crude Oil to highlight this exact concept.

From the desk of Steve Strazza @Sstrazza

There aren't too many charts in the Equity Markets breaking out of decade-long bases on an absolute basis right now...

This week's Mystery Chart was though, and the vast majority of you were buying it against former resistance turned support. We agree with that approach and would be doing the same here.

Thanks as always to all those who participated, but there's just one catch...

The chart was inverted! This means most of you were actually selling the breakdown in the Latin America 40 ETF (ILF).

When we talk about "Precious Metals", it can mean a lot of things. You've got the metals like Gold and Silver, which are behave very differently at times, and you have the stocks with all sorts of market capitalizations. There are a lot of ways to describe the precious metals space, so let's get into a little bit of that today.

Here is a chart of what this group looks like this year. Notice the outperformance from the Gold Miners Index Fund, almost twice the performance of the metal itself. The little guys and silver in general didn't perform nearly as well:

Click on Charts to Zoom In

From the desk of Steve Strazza @Sstrazza

There has been a lot of talk about the potential implications on the broader market if Mega-Cap Growth and Technology stocks were to lose their leadership. Since they have been responsible for driving much of the gains in the major averages for years now... we can only ask ourselves, who might pick up the slack if and when this happens?

In this post, we're going to analyze the top-performing areas today and compare them to their strength before the market crashed in February and March.

We'll also look at the leaders from back then and see how they're holding up today.

This will give us an idea of whether we really are undergoing a change in leadership or not, and if so, where the new areas of strength are.