There are times to make money in the market and then there are times to keep your money.
In sports you play offense and you play defense.
Offense sells tickets, but defense wins championships.
That’s how I learned it. [Read more…]
Expert technical analysis of financial markets by JC Parets
by JC
There are times to make money in the market and then there are times to keep your money.
In sports you play offense and you play defense.
Offense sells tickets, but defense wins championships.
That’s how I learned it. [Read more…]
by JC
This is what corrections look like.
When Consumer Staples bottomed out on March 1st relative to the rest of the market, that was one of the first signs of defensive rotation.
At the time, we chalked it up as just one signal, of many that we monitor.
But as the month has progressed, the soldiers continue to fall.
Aussie/Yen has rolled over and we’re even getting a bid in US Treasury Bonds: [Read more…]
by Peter
From the desk of Willie Delwiche.
Key Takeaways:
Apparently, there is a ship stuck in the Suez canal. Pictures show the “Ever Given” container ship turned sideways in the narrow waterway, with its bow wedged on one bank and its stern close to the other bank. This ship, according to the Wall Street Journal, is one of the largest in the world. It’s 400 meters long (longer than the Empire State Building is tall) and can normally move 20,000 containers. In the current situation not only is it not moving its 20,000 containers but has ground to a halt all traffic in both directions in one of the world’s busiest waterways. On average, 55,000 containers travel through the canal on a daily basis, in addition to numerous ships carrying oil and liquified natural gas. The goods are there, but they are not moving.
We’ve seen quite a move lower in $TLT (which moves inversely to interest rates) since this summer.
Is the bottom in?
My crystal balls says: “Don’t ask me stupid questions.” So, that’s no help.
But here’s what I know:
The bet I’m making is $TLT is going to chop around in a bit of a range over the next 2-6 weeks and this will cause volatility to contract.
So here’s how I’m going to play it:
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.
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.
by JC
Bear Markets are environments where a majority of stocks are falling in price for a prolonged period of time.
Sometimes you’ll hear lies about a 20% decline defining such things, but that’s just bullshit.
The number 20 is a completely arbitrary number that has absolutely no meaning. Thinking it does is foolish. Why 20? Why not 19.5? or 20.2?
There is no reason. They’re just lies.
If you ever hear anyone say that, “A bear market is when it falls 20%”, you know it’s because they’re in the entertainment business, not in the truth business.
Stay away from those kinds of people. They’re not here to help.
It’s their job to distract, it’s our job to ignore.
In reality, expansions in the new low lists are things you’ll find near the beginning of market declines. You’ll see spikes in these lists that haven’t been seen in years.
Here’s what this looks like coming into the week. It’s still a ghost town: [Read more…]
by Peter
From the desk of Willie Delwiche.
Key takeaway: After a healthy unwind over the past few weeks that allowed sentiment to reset to neutral, we are seeing optimism rebuild. This uptick in optimism has been accompanied by (as we show in our chart of the week) another breadth thrust. There is room for a further expansion in optimism before it becomes an excessive headwind – and continued broad market strength diminishes such a signal in any event. The combination of breadth thrusts and persistently elevated optimism is reminiscent of the late-2016 to early-2018 period. Then, equity ETFs saw 20 consecutive months of in-flows – we are currently in our 10th consecutive month of inflows (although the pace is quickening, with a record $100 billion over the past four weeks). Equities ran into trouble in early 2018 when breadth thrust tailwinds subsided but elevated optimism remained.
Sentiment Chart of the Week: Another Breadth Thrust
The percentage of stocks in the S&P 1500 above their 10-day moving average rose above 90% last week, signaling yet another breadth thrust. This is very constructive for equities as both optimism and breadth expand.
by JC
We don’t need to make a whole thing about it. But I did just want to take a moment to thank everyone for the last 10 years.
I wrote my first blog post on this site in March of 2011. That was 10 years ago this month.
It’s been a pretty unbelievable ride ever since.
I don’t even know where to start. Hopefully one day I can write a book about it and tell you the whole story.
There are so many people to thank that we’d be here forever. [Read more…]