Expert technical analysis of financial markets by JC Parets
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Earlier in the week, we held our July Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.
Let’s get right into it!
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
One of the main themes we discussed in the Q3 Playbook we published last week is the lack of any directional bias for equities on a relative basis.
We’ve been obnoxious about the trendless environment for equities on an absolute basis… and now we’re noticing a lot of the same play out in many of the relative trends we monitor.
When there is no edge on absolute terms, we can at least try and generate alpha by taking advantage of relative trends through pair trades.
But, right now there’s really nothing out there giving us an opportunity to do so. This is about as rough of an environment for money managers as you’ll find.
All we see is sideways, sloppy, range-bound action… Standard year-two stuff!
To illustrate what we mean, let’s take a look at each large-cap sector SPDR relative to the S&P.
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
It’s a tale of two markets.
The weight of the evidence remains mixed across asset classes. We also continue to see more and more risk assets struggle at overhead supply. This is particularly true for equity and commodity markets.
From an intermarket perspective, most risk appetite ratios and risk-on relative trends are either moving lower or are rangebound.
Simply put, there’s little in terms of directional edge for investors. The data remains split right down the middle — and there are sound arguments for both the bull and bear case.
Although the information we’re getting from the Bond Market is much more consistent these days. And what we’re seeing is suggesting lower yields for longer.
Let’s take a look…
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Thanks to everyone who participated in last week’s mystery chart.
We asked whether the chart could make a decisive upside resolution out of its consolidation pattern, or if this level will continue to act as resistance and keep a cap on prices.
The responses were mixed, with many wanting to wait for more information. In many cases, people were looking for confirmation of a breakout.
The chart was a daily candlestick view of the iShares Semiconductor Index ETF $SOXX.
Not much has changed since we first posted the chart. In fact, price has yet to make a decisive move from this key level. Let’s dive in and see what’s happening and where it’s likely headed.
This is the video recording of our July 6, 2021 Monthly Charts Live Strategy Session
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.
