One of the relative trends we must regularly evaluate is the relationship between large-caps and small-caps.
Sometimes large-caps outperform. Other times, it’s the little guys leading the way.
This ratio tells us which ones we should be focusing on.
The chart below shows the Russell 1000 Large-Cap ETF (IWB) relative to the Russell 2000 Small-Cap ETF (IWM) breaking out of a monster-basing formation.
Our International Hall of Famers list is composed of the 100 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 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.
Let's dive in and take a look at some of the most important stocks from around the world.
The negative correlation between equities and the dollar remains intact, representing a fundamental piece of the current intermarket puzzle.
When the dollar strengthens, stocks tend to fall under selling pressure. On the flip side, stocks often enjoy strong bull runs when the dollar trends lower.
Banks are considered one of the world's most important industry groups as they provide an excellent overview of the economic environment and overall risk appetite toward markets.
After suffering a deep decline in Q1, prices carved out a tradable low, rebounded, and settled into a well-defined trading range.
However, these laggards continue to be a concern for the financial sector and the broader market as the charts look vulnerable heading into earnings season.
Here we have Money-Center Banks $KBE, Regional Banks $KRE, and Community Banks $QABA, all of which are below their AVWAPS from the May lows:
Just don’t tell the US dollar, which has managed to post positive gains for 11 straight weeks.
But the US Dollar Index $DXY is sporting its deepest drawdown since mid-July – a mere 0.2% – as buyers catch their breath.
Five down days and counting have my attention, though it doesn’t shift my bullish bias for King Dollar.
Not yet!
Check out last week’s DXY candle:
Buyers drove prices higher over the course of last week only to succumb to selling pressure by Friday’s close.
The long upper shadow and small real body at the lower end of the range form a “northern doji” candlestick. It indicates the market is exhausted, explaining the continued selling pressure.
But it’s the first lower weekly close in 12 weeks. The DXY hasn’t gone on...