Consolidations tend to resolve in the direction of the underlying trend. But when they don't, that's the signal!

An oldie but goodie from the past, that I always think about when this comes up, is the US Treasury Bond Fund back in the Fall of 2016. I remember chatting with Liz Claman at the time about it on FOX. The $TLT was consolidating in a classic, textbook continuation pattern above former resistance from the early 2015 highs:

The bet we were making (for many other factors as well at that time) was that this was not a continuation pattern, and instead a massive failed breakout.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 29, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

This was a special week as Friday marked the end of May which means fresh monthly candlestick data. Analyzing these long-term monthly charts every several weeks is a great exercise as it forces us to take a step back and identify the structural trends that are in place.

As such, this week’s theme is the continued outperformance over both the short and long-term from those areas sporting the strongest primary uptrends.

Tech $XLK is by far the best performing sector over the trailing year. It is also the 2nd best over the past month and quarter, behind Communications $XLC and Health Care $XLV, respectively. Not surprisingly, these same sectors are also the next best performers over the trailing year.

Earlier this month we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.

In this post, we'll update those charts without going into as much detail as to why they're important. So if you haven't read our initial post linked above, we'd encourage you to check it out.

With that said, let's jump in and see how these charts have developed since.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 22, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

This week’s main theme is risk-on action from beaten-down areas which we'll highlight in our US Index and Factor ETF tables, below.

We're putting a lot of emphasis on risk-appetite measures right now in order to provide insight into how the recent rangebound activity in Equity and Bond markets is likely to resolve itself.

The most basic way to assess risk-tolerance is to compare the performance of risk-on vs risk-off assets. As such, this post will focus on how the offensive vs defensive areas of various markets are acting right now.

Click table to enlarge view.

Earlier this month we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.

In this post, we'll update those charts without going into as much detail as to why they're important. So if you haven't read our initial post linked above, we'd encourage you to check it out.

With that said, let's jump in and see how these charts have developed since.

This is the video recording of the May 2020 Conference Call.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 15, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

This week's main theme is that the strong continue to get stronger and vice versa, which we'll highlight in our Industry and Sector ETF tables, below.

Notice how the top three performers this week also happen to be the only Industry ETFs that are positive over the trailing 3-month period?

Gold Miners (GDX), Biotech (IBB), and Internet (FDN) posting positive 3-month returns may not sound like much but is actually quite impressive as it means these areas have already taken out their highs from just before the broader market peaked and collapsed in February.

Click table to enlarge view.

Earlier this month we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.

In this post, we'll update those charts without going into as much detail as to why they're important. So if you haven't read our initial post linked above, we'd encourage you to check it out.

With that said, let's jump in and see how these charts have developed since.

From the desk of Steve Strazza @Sstrazza

This week's Mystery Chart was a simple yet pivotal one... it was a ratio chart of Stocks vs Treasury Bonds.

With stocks struggling at resistance this week and Treasuries meandering beneath all-time highs, both appear to be at key inflection points.

Making things even more interesting is that the S&P 500 (SPY) relative to 20+ Year Treasury Bonds (TLT) ratio is also at a key level of interest. It is make-or-break time for these two asset classes so let's dive in and see what's going on.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 8, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Many of the relative trends in stocks that have been in place for a long time have come into question recently as they're showing signs of maturing due in part to the change in leadership we wrote about this week.

In this post, we'll highlight two structural intermarket themes that have remained robust throughout this tumultuous time for equity markets.

The first relative trend that hasn't slowed down at all is the relentless outperformance of the US over the rest of the world. Our first table shows the Wilshire 5000 (DWC) dominating every Global Index over just about every timeframe, from this week to the trailing year.

Click table to enlarge view.

Bull market? Bear market? Sideways market? That is the question on everyone's minds.

We've put together the five most important charts we're monitoring to help answer that question.