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.