How’s the market done in 2021?
That’s a tough one to answer.
And I’ll tell you why.
January was still what most of 2020 was like. The environment isn’t going to change based on the calendar year. It’s going to do what it wants. [Read more…]
Expert technical analysis of financial markets by JC Parets
by JC
How’s the market done in 2021?
That’s a tough one to answer.
And I’ll tell you why.
January was still what most of 2020 was like. The environment isn’t going to change based on the calendar year. It’s going to do what it wants. [Read more…]
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Let’s flip the script this week and take a more granular approach to our analysis of market internals.
In recent months, we’ve written at length about deteriorating breath. While it’s been our position that the divergences in these indicators are normal following an onslaught of initiation thrusts like the ones we had last year, the lack of participation beneath the surface was drying up to levels that were simply not sustainable.
This lack of confirmation has caused many to question the new highs from the S&P 500 and other major US averages. But, the major averages have masked the pervasive weakness we’ve already been experiencing beneath the surface this year.
In last week’s post, we discussed this weakness in breadth and posed the following question:
Perhaps we’ve already seen the market correct beneath the surface. Maybe that was it…
The major averages are simply not a good representation of what US stocks have been doing for the past 6 months. So why do weak internals have to result in any significant downside for these indexes?
We don’t think they need to. In fact, we’ve seen breadth improve in recent weeks and we’re now seeing expansion in favor of the bulls again.
In today’s post, we’ll discuss these new developments with a focus on those areas that had been exhibiting the weakest internals – value and cyclical groups.
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
We’ve been super obnoxious about the deterioration in new highs we continue to see in the US.
But the major averages haven’t been phased a bit. The S&P 500 and other large-cap indexes keep charging to new heights.
Yet when we look beneath the surface, we’re hearing a different story… The vast majority of stocks have NOT been making new highs along with the averages. In fact, we’re beginning to see an expansion in new lows.
This is a new development that’s commanding our attention right now, mainly because these are the weakest conditions we’ve seen many of our breadth measures since last year.
At the same time (and just like JC mentioned in his note from yesterday) we’ve already seen a stealth correction for the better part of this year!
Most stocks are simply NOT making new highs, and haven’t done so since Q1. Plenty more are trending sideways and have already been consolidating for months.
Perhaps we’ve already seen the market correct beneath the surface. Maybe that was it…
From the desk of Steve Strazza @sstrazza
We’re going to flip the script a bit this week with our RPP Report. We typically don’t publish a report during week’s where we have a monthly conference call as JC covers our positioning and summarizes our key themes and views there.
But we didn’t do one last week either because we had just published our Q3 Playbook which laid out our current position in a painfully detailed manner (it was 250 pages!).
Premium members: read it here if you haven’t yet.
In today’s post, we’re simply going to recap our “Key Themes For The Current Quarter” and update clients on some major developments that have taken place in the past few weeks.
We’ve got some important things to cover so let’s get right to it!
The market has moved into a sideways trading range again. Post making new highs Nifty has traded sideways for over a month now.
While the Indian market has displayed a great deal of resilience compared to other markets, we’re yet to see positive breadth thrusts and moves.
Let’s take a look at what the breadth analysis is pointing at, given the current market setup. [Read more…]
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
You’re probably sick of hearing this but it’s important! Even with the recent bout of volatility, new lows have been non-existent across most of the major averages in the US.
To be fair, many of our Intermarket relationships are still flashing red, suggesting continued headwinds for risk assets.
Earlier this week we saw significant selling pressure in equity markets both domestically and abroad. Conditions are as ripe as they’ve been in more than a year for the bears.
So, did we finally get that “fall day,” as our fellow Technician and friend Mike Hurley likes to call it?
The simple answer is no…
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Several weeks back, we discussed the fact that new lows were non-existent across just about all of the major averages in the US.
It’s pretty hard for a market of stocks to decline in any meaningful way without an expansion in downside participation. And we just aren’t seeing any signs of this when looking through our breadth chartbooks and new low indicators – not even on shorter timeframes. This remains the case today.
We’ve been pounding the table on our view that this is nothing but a messy market, as well as the fact that many significant risk assets are chopping around key resistance levels.
So you would think this would be an excellent opportunity for the bears to take control… But, they just can’t seem to get it done! Let’s dive into some of our breadth and sentiment indicators and see what they’re currently saying about this.
by JC
This is our ASC Research Q3 2021 Playbook.
With the current market environment giving us many mixed messages, what better time to dive in and see what’s happening underneath the surface?