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Expert technical analysis of financial markets by JC Parets

RPP Report: Review. Preview. Profit. (Q3 Playbook Update)

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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!

[Read more…]

RPP Report: Review. Preview. Profit. (06-28-2021)

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From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return 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 to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

We’ve been pretty obnoxious about our position that markets are a total mess these days. But it is what it is, and we can only play the hand we’re dealt. 

You can try picking profits out of a trendless environment but at the end of the day, most investors are better off on the sidelines. Imposing one’s will upon the market is rarely a winning strategy. We’d rather trade what’s in front of us. 

We’ve covered the best evidence from both the bulls and bears camp of late, and played devil’s advocate with the data we have. We continue to track and point out the most important upside and downside resolutions across global markets. And we keep pounding the table on the theme that so many significant risk assets are currently trading at critical resistance levels. 

[Read more…]

Risk Scorecard Shows A Draw

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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!

[Read more…]

[PLUS] Weekly Momentum Report & Takeaways

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From the desk of Steve Strazza @Sstrazza

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 context of the big picture 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.

[Read more…]

International Rotation Points to a New Frontier

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From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Thanks to everyone who participated in last week’s mystery chart.

We asked whether this chart had the momentum to finally reverse course and break loose from the grips of its primary downtrend.

The responses were mixed, with many wanting to wait for more information… In many cases, looking for confirmation of the impending breakout.

Well, not much has changed as the chart has yet to make a decisive move from this key level.

The chart was a weekly candlestick view of the MSCI Frontier Markets ETF $FM.

Let’s dive in and see how we want to play this index comprised of stocks from some of the least developed countries around the world.

[Read more…]

RPP Report: Review. Preview. Profit. (06-16-2021)

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From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return 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 to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

And at present, markets are a total mess and full of mixed messages as most major stock market indexes continue to churn sideways in consolidation patterns, while many risk-on commodities are in corrective phases.

While the weight of the evidence still remains in the bullish camp, bears seem to add to their list of talking points with every passing week. We believe the highest probability outcome over the coming weeks to months is for risk assets to remain in a mixed and messy environment. Once we begin to see evidence that indicates the current “chop fest” is nearing an end, which could simply come in the form of a reduction in the number of bearish data points, we think this party resumes in the direction of the primary trend… which remains aggressively higher in most risk assets.

But as the evidence becomes increasingly mixed, so does the way we want to approach the market and position ourselves to profit from the present environment. While we’re still buying plenty of stocks exhibiting leadership all around the globe… for the first time in over a year, we’re focused more on shorting the losers.

Check out some of our recent shorts on our trade ideas page.

Last week, we discussed how a lot of the most recent evidence has tilted back in favor of the bulls with a number of upside resolutions, particularly in international equity indexes.

Well, what a difference a week can make. This past week, we saw the opposite as some major risk assets are now failing at key levels.

Again, this speaks to the mixed messages the market is sending now that these holding patterns are beginning to resolve. They’re resolving in both bullish and bearish directions… at least for now.

In today’s post, we’ll offer the opposing view from last week. We will also highlight some key charts that are experiencing bearish resolutions.

[Read more…]

[PLUS] Weekly Momentum Report & Takeaways

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From the desk of Steve Strazza @Sstrazza 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 context of the big picture 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. [Read more…]

RPP Report: Review. Preview. Profit. (06-09-2021)

by

From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return 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 to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

While the weight of the evidence still remains in the bullish camp, bears seem to add to their list of talking points with every passing week of late. We believe the highest probability outcome over the coming weeks to months is for risk assets to remain in a mixed and messy environment. Once we begin to see evidence that indicates the current “chop fest” is nearing an end – which could simply come in the form of a reduction in the number of bearish data points, we think this party resumes in the direction of the primary trend… which remains aggressively higher in most risk assets.

But as the evidence becomes increasingly mixed, so does the way we want to approach the market and position ourselves to profit from the present environment. While we’re still buying plenty of stocks exhibiting leadership all around the globe… for the first time in over a year, we’re focused more on shorting the losers.

The latest incoming evidence has been overwhelmingly bearish and has continued to reinforce our cautionary outlook. Although, we have reason to believe this could finally be changing as risk assets made some real progress since our last RPP Report.

We still need to see some follow-through and confirmation of these developments, but over the past two weeks, we’ve seen more bullish data points than we have in months.

The ever-growing list of stocks and other risk assets consolidating at resistance has been a main theme we’ve hit on relentlessly of late. This had caused us to turn more and more cautious in recent months.

Well, much of the bullish information we’re seeing is from many of these holding patterns resolving higher from key levels of interest.

[Read more…]

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