Intermarktet Analysis Archives

“What Is A Value Stock?”

February 25, 2021 by JC

Some of us are old enough to remember a time when Value stocks were the place to be. The kids these days look at me like I’m nuts when I talk to them about banks and energy stocks!

There’s a whole world of companies that used to do great. In fact, early in my career these were the names to be in: BTU, WLT, LEH, MER, BSC….. Good times!

Tech and all that other stuff came much later and has been the big driver in the U.S. over the past decade. But the rest of the world has suffered, without that exposure to Tech and Growth, and instead loaded with banks and natural resources, the worse places on earth for some time now.

Fast forward to today and we continue to get more and more evidence suggesting that it’s changing.

It’s no longer US over International and EM. It’s been EM and International over US. It used to be Growth over value for so long.

That’s just no longer the case: [Read more…]

Credit Is Fine. Buy Stocks.

February 23, 2021 by JC

It’s not about a virus or any economic reports. It’s about Credit.

We’ve said it before and we’ll say it again.

Look at last year, for example. By the time the S&P500 finally put in its high in February, everything else had already been falling apart. Small-caps, Mid-caps, Micro-caps, Financials, Transportation, Emerging Markets, New Highs list, Advance-Decline Line, the Value Line Index and S&Ps relative to its alternatives had all been pointing to stocks falling.

There was more data early last year suggesting to be completely out of stocks, and in bonds instead, than before any other crash in stock market history. We discussed this last week.

But even if you ignored all of those factors. And you just looked credit, you would have seen Treasuries significantly outperforming the rest of the bond market. Credit told you: [Read more…]

RPP Report: Review. Preview. Profit. (02-22-2021)

February 22, 2021 by Steve Strazza

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.

Every major asset class on Earth continues to illustrate risk-taking behavior on the part of market participants.

Yields, Oil, Equities, Base Metals, the Australian Dollar — there’s an overwhelming amount of new highs in offensive areas of the market right now. The weight of the evidence continues to suggest that we want to be buyers, not sellers, of stocks.

The same bullish developments and themes that we’ve been pounding the table on for months continue to reinforce our stance. Some examples: the rotation into SMIDs, breadth thrusts, the reflation trade, and defensive alternatives making relative lows.

As we said last week, bulls are flush with options to make money in this environment. At the same time, the list of opportunities for bears continues to dwindle by the day.

[Read more…]

But What If We’re Wrong?

February 22, 2021 by JC

What does the market environment look like if stocks are under pressure, and loading up on stocks is probably a bad idea?

Well, I’d argue we’ll probably stop seeing new highs in Aussie Dollar and US 10-yr Yields: [Read more…]

Let’s Have A Good Laugh Together

February 22, 2021 by JC

It’s hard not to laugh a little when we say ridiculous things like,

Regional Bank Stocks continue to be the market leaders during this Global Pandemic….”

Especially in front of a group of investors who think they’re smart.

This is like the “least smart” comment you can make, according to some circles… [Read more…]

Broker-Dealers Break Out

February 21, 2021 by Louis Sykes

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

In a recent post discussing cyclicals, we posed the following question:

Are Energy and Financial stocks about to lead the market?

Cyclical groups are catching all the right tailwinds in this environment.

Crude Oil and Yields are pressing to new 52-week highs as investors continue to favor more economically-sensitive stocks and commodities in general. This is a bullish development and supports higher prices for some of the most beaten-down risk assets… even Financials and Energy.

As participation has expanded, we’ve been vocal about looking for the winners in each group without a sector bias based on relative strength.

The reason for this is simple… In a market where everything seems to be trending higher on an absolute basis, we want to put less emphasis on looking for leadership groups and instead keep our options open and find asymmetric risk/reward opportunities across the entire market.

In today’s post, we’re going to focus on the Capital Markets Industry. It’s not just offering favorable long setups at both the Industry and component level – which we’ll discuss below – but as a kicker, it’s also an area of relative strength.

[Read more…]

February Conference Call: 5 Key Takeaways

February 17, 2021 by Steve Strazza

From the desk of Steve Strazza @Sstrazza.

We recently held February’s Monthly Conference Call which our Premium Members can access and rewatch here.

In this post, we’ll provide a summary of the call by highlighting 5 of the most important charts/topics we covered along with commentary on each.

Let’s dive into it.

[Read more…]

RPP Report: Review. Preview. Profit. (02-08-2021)

February 8, 2021 by Louis Sykes

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.

In last week’s report, we played “devil’s advocate” and laid out some of the more bearish developments we could find out there.

But all-in-all, the market is still providing bears less room to make a sound argument. We continue to find that any bearish evidence is primarily isolated to shorter timeframes… and even then, still overwhelmed by the abundance of bullish data points.

So while a minor rise in volatility can be expected in what tends to be a seasonally weak month of February, over a longer timeframe, we’re still aggressive buyers of stocks.

When we poured over our chartbooks this weekend, it became clear that there are eager hands for risk assets, as countless pullbacks were met with overwhelming demand.

Sentiment right now is also incredibly supportive of higher prices as investors are clearly still skeptical of this rally. This was illustrated well when the VIX was bid up to its highest level in history during just a 5% pullback at the end of last month.

This is all supportive of our case that a brand new bull market is just leaving the station.

[Read more…]