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.
It's one thing stacking up all the topics you need to learn for the test, but it's another to take on lasting knowledge that'll carry you for the years ahead.
Shooting through the textbooks and lectures reinforced that despite all the charts I go through, the process I use represents only a very small proportion of the way people interpret technical data. Seriously, there were dozens of indicators, ways to plot price, and even basic assumptions on why we do technical analysis that I had never come across.
This was all so great to learn.
While I might not use these tools on a day-to-day basis, understanding how people look at markets differently and expanding my knowledge and skills can only be a strength.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying stocks as they climb the market-cap ladder from small, to mid, to large, and ultimately to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.
The Energy sector has had some interesting moves in both directions in 2020.
Sell off with everything else in March. Hard bounce with everything else in the Spring. Then a slowly accelerating slide into mid October where it caught another bounce.
But what's notable to me is that the down move which ended in October did not undercut the March lows, and the current recovery seems to be running out of steam below the June highs. Feels to me that Energy, and it's $XLE sector ETF is consolidating.
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This month’s Conference Call will be held onMonday December 21st at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.
Remember 3 years ago when Bitcoin was the talk of the town and everyone wanted in? Well, by then anyone who wanted to buy it had already done so. Bitcoin went on to lose over 80% of its value over the next 12 months. That's how bubbles end. An instant classic.
Now, as we've learned, newer markets in their infancy stages tend to have faster and more frequent cycles. When you go back and study the US Stock Market in the 1800s, for example, there was a "Panic" every other year. It was the wild west back then.
Welcome to the 21st Century's version of the wild west. Cycles happen faster. Bubbles collapsing take less time to reset and begin a new leg higher. I think this is something we should continue to expect in the Crytpo space.
Here we are just 3 years after the bubble peaked, working on a fresh breakout and new leg higher. To put things in perspective, Financials are still down from their peak in 2007, over 13 years later. Technology took 18 years to finally surpass its 2000 bubble peak. And Japan is working on over 30 years so far and still 45% away from its 1989 bubble highs.
Nifty FMCG broke above its long-term resistance last week, moving out of a more than two-year consolidation. While the selected-few large caps from the sector have performed well with the rest of the market in the run up so far, we believe that the rest of the sector is on its way to play catch up.
Let’s take a look at the sector and see what the charts have to say.
The Mega-cap names have been digesting their 2020 gains since early September. Go one by one and most of them are down over the past 3+ months. All except the last one at the bottom.
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.
In last week's report, we discussed the continued rotation into SMIDS, international markets, and risk assets. Our conclusion is and continues to be that the market remains in a very healthy state of order.
FICC markets are also confirming the move higher in equities.
From a short-term perspective, SMIDS digesting their recent gains would be a healthy development.
Welcome to our “Under The Hood” column for the week ending December 11, 2020.
What we do 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.
We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.
Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.
The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.
I'm not sure when this happened. When did they start grouping any company that uses a computer into the Technology Sector?
First of all, 80% of the FAANG stocks represent a ZERO weighting in the Technology Sector. ZERO.
Facebook and Google are in the Communications Index, together representing approximately 45% of that sector. Combined, $FB & $GOOD represent ZERO percent of the Technology Sector. Netflix $NFLX accounts for another 4% or so Communications, and again, a ZERO weighting in Tech.
Furthermore, Amazon represents approximately 21% of the Consumer Discretionary Index. When you look at the Technology Sector, you'll find that $AMZN has a ZERO weighting.
The latest version of journalists grouping any company that uses a computer into the "Technology Sector" is Airbnb and DoorDash. Neither one of these are in the Tech sector, but instead are both in the Communications Index. Together $ABNB & $DASH represent a ZERO weighting in Tech.
Meanwhile these are the fairytales they feed you...
