From the desk of Steve Strazza @Sstrazza
We have been adamant about our view that we are in a rather messy environment. For this reason, we’ve been approaching markets with caution for months now.
Up until earlier this year when risk assets began consolidating in sideways patterns, it had been nothing but blue skies and new highs.
When the weather report is sunny, the water is calm, and the sky is clear, we know the weight of the evidence is with the bulls and we can focus our attention on finding the best opportunities in the strongest areas as ways to express our thesis.
But that’s just not where we find ourselves today. The current forecast is cloudy with a chance of rain. And it’s already been overcast for months!
And when the outlook is murky, as it is now, we want to take a step back and really weigh the evidence that’s in front of us. We need to stay up on incoming data points and monitor how markets react with so many charts currently at key levels of interest.
Luckily, we can use the fact that so many risk assets are at inflection points to our advantage, as each upside or downside resolution will bring us new bullish or bearish evidence, respectively.
We love making checklists to use as roadmaps during times like these. As such, we’ve put together a risk-on/risk-off scorecard whereby we list some of the most important charts and the corresponding levels we’re watching. We believe that how price resolves from these areas will hold crucial information as to the likely future direction for markets.
In this post, we’ll explore our new risk-on/risk-off checklist as well as reveal this week’s Mystery Chart, which just happens to be on our list!