This is the video recording of our May 3, 2021 Monthly Charts Live Strategy Session
Bearish or Bullish: Is This Time Different?
On this week’s episode of Bearish or Bullish, we talk about Year 2 of Bull Market cycles for stocks. Is this one those? Like 1976, like 1983, like 2004, like 2010?
What about Ethereum continuing to hold its breakout? Why is Ether doing so much better than Bitcoin?
Financials and European stocks breaking out of historic bases?
European Super Leagues? The Knicks don’t suck?….what the heck is going on around here?
Let’s discuss: [Read more…]
RPP Report: Review. Preview. Profit. (04-26-2021)
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 weight of the evidence still suggests it’s prudent to be a buyer, not a seller, of risk assets for more meaningful time horizons.
Shorter-term, the market looks increasingly messy. For the first time in over a year, defensive assets are beginning to stabilize at logical levels of support, while stocks and major risk groups achieve our upside targets. Even a handful of some key Intermarket ratios are potentially diverging from the broader averages.
The macro backdrop definitely leans that this is just a sideways consolidation in an ongoing uptrend.
Let’s not forget that the S&P 500 has just recorded its greatest 52-week gain since the late 1940s, so some digestion is perfectly healthy and deserved!
Clues From Credit Markets
From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @GrantHawkridge
The credit market is overflowing with information.
We haven’t discussed it too much lately… but that doesn’t mean we aren’t paying close attention.
It would be foolish to overlook it. After all, they call Bond traders the “smart money” for a reason… Right?
We’ve recently discussed the theme and likely implications of how so many major stock market indexes – in both the US and abroad, are hitting very logical levels of overhead supply right now.
We think it’s no coincidence that all of this is occurring at the same time. And you’ll never guess what else…
We’re also seeing this very same behavior from some of the most important Bond Market ratios we track, as many are currently running into crucial inflection points.
[Premium] Monthly Conference Call Video Recording April 2021
This is the video recording of the April 2021 Conference Call.
RPP Report: Review. Preview. Profit. (04-19-2021)
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 same themes that we’ve been pounding the table on more or less continue to drive primary trends.
In recent weeks, we’ve seen some rotation back into Large and Mega-Caps, which has propelled the major indices to new highs, while SMIDs are still resiliently consolidating. While the list of negative data points has grown, it’s still not close to anything that warrants concern.
Developed Markets, particularly European equities, are resolving higher across the board — a move confirmed by strong breadth and bullish internals. In short, we continue to see strong equity market participation around the Globe.
We’re also seeing signs of another leg higher for the Commodity complex as more positive economic data pours in.
Ultimately, risk markets remain in a healthy state right now.
[Video] BNN Bloomberg: Stocks, Ethereum and Lumber
Last night I popped into BNN Bloomberg to talk about what’s going on in the market.
We’re seeing new highs across a lot of major indexes, but what’s happening underneath the surface?
We’ve been seeing the price of lumber soaring along with things like Steel and Rebar futures. It’s the whole demand/building/growth theme that continues to stand out.
One thing that’s definitely worth watching is the All Country World Index Ex-U.S., which is basically a snapshot of what the rest of the world looks like. And you’ll notice that the index ETF $ACWX is stuck right between its 2008 highs and 2018 highs.
This puts the global stock market in quite a predicament. If you’re bullish equities, you’re going to want to see a breakout through those historic 2008 highs. If you’re bearish equities, this is one you want to see break back below those 2018 highs.
Check out the video in full. This was fun:
USD Testing Critical Levels
Several areas of the market have reached key levels of support or resistance.
Crude Oil continues to digest recent gains just below overhead supply near its former 2019 highs.
The Euro/Dollar is finding support at the recently violated 12-year downtrend line.
And the Emerging Markets ETF $EEM continues to consolidate near its 2007 highs.
Meanwhile, the US Dollar is also testing key levels.
USD strength has become a major market theme over the last couple of months — along with the potential effects it could have on global risk assets. A strong US Dollar could apply pressure to Emerging Markets, Commodities, and cyclical assets in general. This would challenge the global growth thesis and the rotation into cyclical areas we have seen play out over recent months.
On the flip side, there are areas of the Currency Market that continue to support the global growth narrative.
Last week, we pointed out the resiliency of commodity-centric currencies in the current market environment, highlighting the Canadian and Aussie Dollars.
This week, let’s take a closer look at another risk-on currency pair as it approaches an inflection point.
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