Welcomeback to our latest "Under The Hood" column, where we'll cover all the action for the week ended November 26, 2021. This report is published bi-weekly and rotated with our "Minor Leaguers" column.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Messy For Longer
Many of the strongest areas for global equity markets are failing to hold their breakouts, or simply reversing at logical levels of overhead supply. The Global Dow is a pretty well-rounded representation of the world stock market. As you can see in the chart, buyers couldn’t get it done for the third time this year. Sellers are back in control for now, and with prices back in their former range, there is no directional edge over the near term. Our bias is neutral, and we’re expecting further sideways action. If and when prices reclaim those year-to-date highs, we want to be long. This is simply the case for most stocks right now.
JC and I traveled to India together a couple years back to meet with Indian prop and options traders and to lead discussions at a few events. It was an amazing experience to be able to view risk through the eyes of traders that come from very different backgrounds than our own.
It should go without saying that we indulged (perhaps overindulged?) in the local cuisine. To be honest, we ate like Kings and it was wonderful. Everything we ate was fantastic and I want to go back as soon as possible. It was such a great time with great people.
So, when perusing the latest crop of new ideas cranked out by ASC team, one name with an Indian flavor caught my attention.
Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.
By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.
Let's jump right into it with some of the major takeaways from this week's report:
* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.
We retired our "Five Bull Market Barometers" in mid-July last year 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.
The market has been in a corrective mode for a little over a month. While this correction has been gaining some momentum, we took a look at the breadth internals of the market at this stage to dig a little deeper.
One important factor when the market was making new highs, was a lack of breadth expansion.
Now the important factor when the market is making lows is breadth expansion.
Our International Hall Of Famers list is composed of the largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more--but only those that are based outside the US. You can find all the largest US stocks on our original Hall Of Famers list.
The beauty of these scans is really in their simplicity.
We take the 50 largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness. Due to the recent volatility, we’re going to do that today.
Let’s dive in and take a look at some of the most important stocks from around the world.
