Instead, our focus has been on expanding global breadth. We believe the burgeoning participation in international markets is constructive for US markets, specifically for cyclical areas.
But are we beginning to see any signs of breadth expansion domestically?
In today’s post, we'll switch gears and turn our attention stateside to address participation among US stocks.
Let’s dive in!
Here’s a look down the cap scale at all three S&P indexes, from large to small:
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Industrial metals have been one of the strongest subgroups within the commodity complex over the trailing year.
The parabolic advance in Steel futures off last year’s lows is an excellent illustration of this.
But lately, we see more and more commodities shift toward sideways trends in the intermediate-term. And lots of them are doing so trapped beneath overhead supply.
A quick glance at charts like crude oil or copper tells this story well -- the last four months have been a chop fest for most.
We questioned whether this consolidation would resolve in the direction of the primary downtrend--in which case we would expect a break lower.
Or maybe buyers would step in and defend those former lows once again.
Despite the lack of bearish momentum readings, many of you wanted to sell on a break below support, citing the primary trend as a major deciding factor.
And that's basically where our heads were, too, as it's always easier to go with the trend.
So what are we selling? Or should I say... buying?
The chart was the Small-Cap Technology ETF $PSCT… but it was inverted!
So those who wanted to sell on a breakdown were actually buyers, and vice versa.
Here’s a fresh look at the chart, right side up this time:
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridg
Money really likes to flow where it's treated the best… and as far as sectors and even most industry groups go, there simply isn't much alpha out there at the moment.
In analyzing relative trends, we’re always aware of how the overall stock market is performing against defensive assets.
In today’s post, we’re going to check in on those sectors investors pile into when seeking safety as opposed to positioning for risk.
Utilities, Real Estate, and Staples... the “bond proxy” groups. Let's dive in.
Here's a custom index of them all charted relative to the broader market.
Notice how the relationship has stopped trending lower since it bottomed back in July.
Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for five to nine years.
We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money.” Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
"I like a $BSX Nov/Mar 50-strike Call Calendar spread for a $1.15 debit or cheaper. This means I’ll be long the March 50 calls and short an equal amount of November 50 calls for a net debit which represents the most I can lose in this trade if it short-circuits on us."
To learn more about the trade and the thinking behind it, click below to watch a replay of the Live Stream.
Key Takeaway: Risks remain elevated from a sentiment perspective. The bulls continue to hold court as bears are relatively absent despite their rise in recent weeks. Though there are signs that the extended reign in optimism may face a new challenge. Earnings revisions have ceased to rise, taking with it a tailwind that has accompanied the bulls for over a year. Without that tailwind, the possibility of a larger sentiment response to downside pressure on stocks increases. Lower prices have a tendency to beget a pessimistic outlook that in turn begets lower prices. This negative feedback loop could fuel a more complete unwind in sentiment than has been seen to date.
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
We held our September Monthly Strategy Session last night. Premium Members can access and rewatch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.
JC & Strazza were riffing this morning on the strength in the Medical Equipment space and so we started brainstorming on some names to play since we expect the strength to continue.
There were a few names bandied about, but the chart and setup that most caught my attention was Boston Scientific Corp $BSX.
What I liked most was the recent consolidation which can act as a solid base of support for a move higher -- which would be all-time highs breaking out of a nearly 20 year base! As JC likes to say: "The bigger the base, the higher in space!" Seems this opportunity has a good shot at that:
