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All Star Charts

Expert technical analysis of financial markets by JC Parets

RPP Report: Review. Preview. Profit. (03-29-2021)

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From the desk of Steve Strazza @sstrazza

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 to profit in the weeks and months ahead.

While the same themes we’ve laid out in previous reports continue to hold strong, we have seen some recent deterioration, particularly in the large-cap sectors and indexes.

Despite an increase in bearish developments, the overall weight of the evidence is still firmly in the bull camp, and we remain aggressive buyers of stocks and risk assets, particularly over any longer-term timeframe.

It is also very important to consider the recent volatility within the context of the primary trend… which is still unequivocally higher in EVERY major US Index.

Over the upcoming weeks, our view is that many of the recent leaders are likely to consolidate at logical resistance levels. So expect some chop. Be ready for whipsaws, and plan your trades accordingly to avoid being shaken out. Position size accordingly and exercise caution.

BUT! Most importantly, be prepared and watch the market closely as this could turn into something more serious, in which case we want to be sure to respect our risk levels and get out if and when they are violated. We put a lot of thought into making sure we always know when and where we are wrong and providing these levels to clients.

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RPP Report: Review. Preview. Profit. (03-23-2021)

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From the desk of Steve Strazza @sstrazza

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 to profit in the weeks and months ahead.

We continue to reiterate the same themes and pillars that support our bullish macro thesis. This would include an abundance of evidence pointing to risk appetite, rising developed market yields, strength from commodities, and of course the ongoing rotation toward cyclicals, value, and international stocks, among others…

Just about anywhere we look, we’re seeing investors gravitate further and further out on the risk spectrum.

At the same time, some of the former market leaders have retreated since February and are currently hovering near key levels. Similarly, even the markets’ more recent leaders have shown signs of weakness the past few weeks as some have violated critical tactical levels while others are consolidating at logical levels of resistance.

We’re seeing this both in the US and abroad… and not just in Equity Markets, but also Credit and Commodities. Even many of the risk-on FX pairs we watch have rallied back to key former highs, a very natural area to see sellers step in.

In this week’s report, we highlight some of the most important charts and corresponding levels we’re currently focused on. As long as our risk levels remain intact, so does our “bullish risk-assets” thesis. On the other hand, if we start to see more and more of these key levels give out, we’ll have to re-evaluate things.

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10 Years of Blogging. Thank you!

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We don’t need to make a whole thing about it. But I did just want to take a moment to thank everyone for the last 10 years.

I wrote my first blog post on this site in March of 2011. That was 10 years ago this month.

It’s been a pretty unbelievable ride ever since.

I don’t even know where to start. Hopefully one day I can write a book about it and tell you the whole story.

There are so many people to thank that we’d be here forever. [Read more…]

Mixed Signals From World Markets

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From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts

The same strong rotational currents that have been in place in the US since last summer have finally begun to spill over to International stocks… but, not all of them.

For the first time in about a decade, evidence suggests that stock markets around the world have finally built a strong foundation relative to their US counterparts, and might just be ready for a sustained period of outperformance.

How big the move will be and how long it will last are always some of the most difficult variables to predict. We can merely position ourselves accordingly based on the information we do have, and then be keenly aware of new data points as they come in, and constantly re-evaluate and adjust our outlook as appropriate.

As for the potential structural bull-to-bear reversal in the long-running trend of outperformance from US stocks… the seeds have definitely been planted for such a development to occur.

Now, we can only sit back and wait to see if those seeds blossom into something real or if they’re duds – in which case the recent price action in favor of International stocks will likely unwind and end up being just another dead-cat bounce.

In this post, we’ll run through some of the things we’re currently keeping a close eye on for an early indication as to whether these recent changes in the global landscape are likely to have some real staying power this time around.

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RPP Report: Review. Preview. Profit. (03-16-2021)

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From the desk of Steve Strazza @sstrazza

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 to profit in the weeks and months ahead.

The market continues to fire on all cylinders right now. Last week’s gains were nothing but a continuation of the same resiliency and momentum we’ve come to expect from risk assets over the last year.

As for what’s providing buying opportunities over the next few months and quarters, it is still strongly centered around cyclical areas pertaining to Energy, Financials, International Markets such as Canada, and Commodities, among many other areas we’ve been hitting on.

Last week’s price action continues to strengthen our view that we’ve reallocated into all the right areas. As such, our best course of action is to continue looking for the best risk vs reward opportunities in these leading groups.

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The REAL Deal Regarding FX Exposure In International ETFs

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From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

One lesson you learn pretty quickly as a market analyst is that not all assets are created equal.

Each and every financial instrument carries its own unique bundle of nuances… from a stocks’ beta or systematic volatility as well as its residual risk, to the fee structure and rebalancing methodology of an exchange-traded fund or note, to the settlement and delivery procedures governing futures contracts.

All of these things impact the behavior and performance of these various markets.

Today, we’re going to focus specifically on the inner workings of International Country ETFs and the way they are impacted by the currency component inherent in these vehicles.

Let’s dive right into it, starting with last week’s Mystery Chart reveal.

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The Evolution Of Emerging Markets

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From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts

Markets never operate in a static manner. Instead, markets are dynamic and remain in a natural and constant state of flux.

In knowing this, we must always remain flexible and aware of the changing conditions and developments taking place around us. We pride ourselves on our ability to evolve and adapt to these changes in market structure and are never dogmatic in our approach.

For the last decade, US large-cap growth has been where the alpha is, and derivatives of this theme like large over small, stocks over commodities, and US over international have been very powerful relative trends. We know this well because we’ve been leaning on them for a long time…

But that’s all changed recently, as we’ve been vocal about the importance of repositioning and decreasing exposure to growth in favor of more cyclical, value-oriented stocks.

If history is any guide, Emerging Markets should be a major beneficiary of this new environment as outperformance from cyclical areas has always acted as a tailwind for this group in the past. Though over the last few weeks, we haven’t seen this at all.

Instead, as money has rotated out of growth, and value has remained resilient, Emerging Markets have come under increasing pressure. So, what gives?

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