We discussed it earlier this week, but now that the weekend is here, it’s a good idea to take a step back and recognize what’s going on.
The bottom line is this: the number of Breadth Thrusts are adding up. [Read more…]
Expert technical analysis of financial markets by JC Parets
by JC
We discussed it earlier this week, but now that the weekend is here, it’s a good idea to take a step back and recognize what’s going on.
The bottom line is this: the number of Breadth Thrusts are adding up. [Read more…]
by JC
It’s Saturday Morning Chartoons time.
This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.
by Ian Culley
From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Gold looks like it’s ready to run.
The largest gold miner in the world, Newmont Mining Corp. $NEM, has broken out of a multi-year base.
Silver and platinum have dug in at critical support levels and are catching higher.
And, most importantly, gold is in the process of reclaiming its former all-time highs from summer 2020.
These are all bullish developments, suggesting gold — and precious metals more broadly — are ready to join in on the party that most commodities have been enjoying for more than a year.
From the desk of Steve Strazza @Sstrazza
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
by Peter
From the desk of Willie Delwiche.
The FOMC meeting is out of the way and the quiet period for Fed speakers that preceded it has ended. We are now getting a barrage of “how we got it wrong” inflation retrospectives and “how we can get it right” policy tightening perspectives from Federal Reserve Presidents and Governors. A proper understanding of both of these helps explain the path we’ve traveled and what might lay ahead. While labor supply crunches and supply chain disruptions have played their part, the Fed seems to have forgotten Milton Friedman’s famous quote: “Inflation is always & everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output.” Money supply rose 25% in 2020 and another 13% in 2021. The Fed’s balance sheet expanded by 78% in 2020 and another 18% in 2021. Inflation soared and has proven not to be transitory in large part because these liquidity increases have persisted. If the Fed is going to get ahead of inflation, it will have to stop blaming exogenous factors and focus on the instruments over which it has some control. And Financial assets will have to adjust to a new reality of less liquidity sloshing through the sluices.
by Peter
This is the video recording of the March 17th Weekly Town Hall w/ Willie Delwiche
03/17/22 2:00 PM ET [Read more…]
by Peter
From the desk of Willie Delwiche.
To the surprise of no one, the Federal Reserve voted to raise its target fed funds rate at yesterday’s FOMC meeting. The 25 basis-point rate hike was fully priced into the futures market. There was only one dissenting vote – St. Louis Fed President Jim Bullard expressed a preference for a 50 basis point hike at this meeting.
I’ll admit I was surprised that neither Esther George (from the Kansas City Fed) or Loretta Mester (from the Cleveland Fed) joined Bullard in his dissent. At the end of the day, the Fed is now in tightening mode, and the pace of tightening is likely to pick up over the course of the year between the combined effects of interest rate hikes and balance sheet drawdowns.
I’m not going to parse the FOMC statement, dissect the dot plot, or break down the summary economic projections. Much of what needs to be said (and a lot of what didn’t need to be said) about the Fed’s decision has been offered in print, over the airwaves, and in our virtual communities.
by Peter
From the desk of Willie Delwiche.
Key Takeaway: There is abundant focus on weekly and monthly surveys showing evidence of investor pessimism with regard to equities. This is at odds with the strategic positioning indicators showing that stocks are expensive and households are historically over-exposed to equities (relative to bonds, but also relative to bonds plus cash). The last two times that II bears exceeded bulls (in 2019 and 2020), household asset allocation data showed only 53% exposure to equities. As of the end of 2021, it was at 62%, an all-time high. So while investors may be identifying themselves as bearish, there is little evidence that investable cash is on the sidelines. With the Fed now raising rates and the market re-considering valuation levels, this lack of available firepower could weigh on equities. Whether today’s pessimism represents a cyclical extreme remains to be seen.
Sentiment Report Chart of the Week: Household Equity Exposure Hits New High
US households finished 2021 with their highest level of equity exposure on record. Households had 62% exposure to stocks, 16% exposure to bonds and 22% exposure to cash.This is quarterly data, meaning it doesn’t reflect changes in market value or fund flows that have occurred this year. Nonetheless, there is a strong inverse relationship between equity market exposure (relative to bonds) and forward returns for the S&P 500 that goes back to the 1950s. If this relationship holds going forward, stock market returns could be disappointing for an investing public that has gone all in for equities.