From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. We can then put these near-term developments into the context of the big picture and glean insights into the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

What do you want from me?

Do you want me to tell you that it's just all rainbows and butterflies?

Is that why you come here?

Or is it because you know I don't give a shit, and I'm just going to give it to you straight every time?

So here's the deal.

We had a heck of a run. That was one of the best 1-year returns of all time.

What more do you want?

Give it a rest. Let Year 2 play out and see if it's like all those others. So far it's exactly like them.

We've seen a ton of relative strength out of the Value areas of the market: Financials, Natural Resources, Industrials...

Those are the areas where we've wanted to be as money has rotated out of Growth.

But now our upside objectives are getting hit all over the place. We laid all that out 2 weeks ago in great detail.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Lumber futures have been on an absolute tear since last spring. The vertical but volatile price action off last year's lows is something for the history books.

After trading down to 250 in late March of 2020, Lumber has since shot back above 1,600, where it trades today. It’s no wonder social media is full of people flaunting their wealth with stacks of timber. 

But we have to ask... is it time for a pullback? Is this rally overdone here? 

Let’s take a deeper look and discuss why we believe the logical move for Lumber over the short term is sideways... or even lower.

Here’s the chart. Look at that face ripper - up nearly 7x in just over a year!

This is a fun one. I got to sit down with Paul Ciana to talk about all things Fixed Income, Commodities and Currencies. Paul is now the Chief Global FICC Technical Strategist and Director of Research at Bank of America Merrill Lynch. But in the early days, him and I used to study for our CMTs together back in 2006.

What's nice about this is that in his current position, and for 10 years at Bloomberg prior to his 5 years at BofA, he's had the opportunity to speak to many of the largest portfolio managers in the world. I want to know what he's learned from all those conversations!

Paul always gives great perspective and as you know, the macro view carries a big weighting throughout our process. So this episode really hit home.

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.

The bullish picture still lies as a structural backdrop.

But now, we're seeing mixed signals as many areas have become increasingly vulnerable in recent weeks. This is all taking place as defensive assets have found a footing for the first time in over a year, while risk-on assets approach logical levels of supply.

Recent weakness has been particularly isolated in former leadership groups, like Small-Caps and Growth-heavy areas. 

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. We can then put these near-term developments into the context of the big picture and glean insights into the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

So commodities seem like they're in the mood to rally! We've seen Base Metals have their fair share of moments in the spotlight, but what about the truly shiny commodities? Where are Gold and Silver off to, next? Or are they consolidating and quietly hatching a plan to break out soon?

Here's an update on what the (presently) less popular metals are doing.

The story of Value stocks continuing to be the leaders is something we absolutely cannot ignore.

But have you noticed? Many investors are ignoring it, particularly in the United States. "I'm a Growth Investor", is what they tell me lol. What even is that?

You can really see this rotation taking place in the ratio between the Nasdaq100 and the NYSE Composite:

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Commodities continue to rip higher. 

Copper is breaking out to new all-time highs. Soybean Oil is trading at its highest levels in over a decade. These moves come as Grains, Lumber, and Base Metals have resumed their near-vertical ascent over the past couple of weeks. 

But risk assets hitting our price objectives or running into logical levels of supply are key themes playing out across the market right now.

As many commodities approach key levels of potential resistance, it raises an important question…

Will sellers step in as they have in stocks?

Let’s look at some charts that could provide valuable information for answering this question.

First up is Aluminum Futures:

The DeFi Revolution is upon us, at least according to Jim Bianco. For many years, I've looked up to Jim and the work he's been doing at Bianco Research and, in fact, he's the one who first inspired me to rip through hundreds of charts during my live presentations in order to get my points across. It took me about a decade to realize it, but it was him who I got that from.

Fast forward to 2021, and the Macro Technician who I've always admired has turned into one of the leading voices of what's taking place in DeFi, or "Decentralized Finance". Who better to talk to about what's going on than Jim himself? Ethereum, Bitcoin, Dogecoin, Yield Farming, Metamask Wallets, Coinbase....the whole thing.

Chop Chop Chop....Classic Year 2 Behavior for stocks continues.

Meanwhile, Crude Oil keeps on pressing up against these former highs. A breakout through 66 looks imminent.

This week we dropped a brand new 2-to-100 Club Report. Which names stood out from this week's scan?

And what about Fried Chicken? Which wine do we pair with that??

All this and more on the latest episode of Bearish or Bullish. Enjoy!

A funny thing happened last week.

Copper prices closed the month at the exact price where it closed in February of 2011, right before it proceeded to get cut in half.

If Base Metals were to correct, wouldn't this be a logical place for it to occur?