This is the video recording of the December 8th, 2022, Weekly Town Hall w/ Willie Delwiche.

12/8/22 2:00 PM ET

From the desk of Willie Delwiche.

Portfolio Update: In our Cyclical portfolio we have moved global equity exposure from Latin America to Europe while in the Tactical Portfolio we are reducing energy exposure to take advantage of shifting global leadership and improving trends from the metals.

From the desk of Willie Delwiche.

The S&P 500 continues to make lower highs as new lows have approached, but not broken below, new highs. This breadth signal occurred as the S&P 500 was peaking in January. It re-emerged near the March and August highs and appears to be doing so again.   

Why It Matters: New high versus new low crossovers are usually fueled more by changes in the new low list than the new high list. New highs edge up slowly in the early stages of a bull market and can peak well before the indexes. The post-COVID bull market was a great example of that. But regardless of the driver, history shows it is important that they take place. As the longest bear market since the Financial Crisis has moved along, investors have been itching to turn more optimistic. But so far the price action (on the surface and below) isn’t doing much to change anyone’s mind or give rise to the increase in bulls needed to have a bull market.

In this week’s Sentiment Report we take a closer look at persistent...

From the desk of Willie Delwiche.

This All Star Charts PLUS Monthly Playbook breaks down the investment universe into a series of  binary decisions, tactical calls and asset allocation models. 

Paired with our Weight of the Evidence Dashboard and our Playbook Chartbook, this piece is designed to help dynamic asset allocators follow trends, pursue opportunities, and manage risk.

The trend in commodities has rolled over but, for the 96th week in a row, the up-trend in commodities relative to stocks remains intact. You need to go back to the early 70’s to see a longer sustained period of strength in commodities versus stocks. 

Why It Matters: For some, commodities are the forgotten step-child of asset allocation discussions. This is especially the case for those with a narrow frame of reference and a lack of historical perspective. Prior to the current trend favoring...

The uptrend for bonds peaked in early 2021. The trend for stocks did so a year later. Commodities peaked in June and over the past few months the trend has been slowly (an unevenly rolling over). 

More Context: It could always reverse higher, but the commodity trend has fallen two weeks in a row and is down in 6 of the past 10 weeks. As the summer peak in commodities moves further into the rear-view mirror, it looks increasingly like all three of the major asset classes are now in downtrends. This leaves investors with fewer places of refuge as the most challenging year in a generation grinds to a close. Business cycle history suggests that the next important turn in trend will be bonds turning higher (and bond yields turning lower). It hasn’t happened yet (despite the recent drop in bond yields) but our long-term trend indicators suggest bonds are closer to turning higher than stocks (and bonds are trending higher relative to stocks). While the pattern is not set in stone, equities have not made the case that...

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. This information then helps us put near-term developments into the big picture context and provides insights regarding 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:

• This week, our macro universe was positive, with 89% of our list closing higher with a median return of 1.26%.
• Silver $SI was the winner, closing with a 7.50% gain.
• The biggest loser was the Volatility Index $VIX, with a weekly loss of -7.02%.
• There was a 2% gain in the percentage of assets on our list within 5% of their 52-week highs – currently at 4%.
• 79% of our macro list made fresh 4-week highs, and 45% made...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

China Bulls Take Charge

Chinese equities have emerged as some of the unlikely leaders among global markets. In the last month, China Internet ETF (KWEB) and iShares China Large-Cap ETF (FXI) have risen 31% and 19%, respectively. Meanwhile, Emerging Markets (EEM) are only up about 8.5% over the same period.

From the Desk of Willie Delwiche.

As the dollar was peaking in late-September, 4% of world markets were above their 50-day average and 4% were above their 200-day average. The dollar now is 8% of that peak (and below its 200-day average for the first time since June 2021). More than two-thirds of ACWI markets are now above their 200-day averages (the most in over a year) and nearly 95% are above their 50-day average (the most in nearly 2 years).  

Why It Matters: Dollar weakness may be the catalyst (or one of several catalysts), but the important development is improving global breadth. That is typically supportive of US stocks. Beyond that, dynamics in the current environment are actually pointing to a changing of the guard in terms of global leadership. The US has seen its relative strength wane while Europe and other developed markets have taken the lead. For US investors, this means abandoning home country bias and embracing global diversification.      

This is the video recording of the December 1st, 2022, Weekly Town Hall w/ Willie Delwiche.

12/1/22 2:00 PM ET

From the desk of Willie Delwiche.

The Scales are unchanged this month, continuing to tip toward risk and away from opportunity. 

A strong finish to November has renewed hopes that the 2022 bear market is moving from present reality to past experience. The weight of the evidence argues against jumping to that conclusion just yet. Simply put, we have not seen enough market strength to justify looking past the still present macro concerns. The evidence remains cautious and so do we. 

Our Weight of the Evidence Dashboard fills in the details and includes a few charts that have our attention heading into December.

From the desk of Willie Delwiche.

The S&P 500 and various measures of investor sentiment all remain below their August highs. We are getting neither the broad increase in optimism nor the improving price action needed to argue that the bounce off of the October lows is the beginning of a new bull market.   

Why It Matters: Price and sentiment often move in tandem. Optimism rebounded as stocks rallied off its October low but has struggled (like it the S&P 500 itself) to eclipse it’s summer highs. All three sentiment indicators have now ticked lower and we are seeing some evidence that the upside price momentum that accompanied the rally off of last month’s lows is starting to wane. Investors getting impatient with an unexpectedly persistent downtrend in prices could be reflected in sentiment indicators moving back toward their recent lows. Ultimately, time will tell how investors respond to their resolve being tested.   

In this week’s Sentiment Report we take a closer look at the latest options data and...

From the desk of Willie Delwiche.

The trend for the S&P 500 has now fallen for 34 weeks in a row. That is the longest sustained decline in the trend since the Financial Crisis ended over a decade ago.       

Why It Matters: Since 1950, the trend for the S&P 500 has been rising nearly 70% of the time. In the process the index has climbed from below 20 to above 4000. During a majority of this time (from the 50s through the 80s) extended periods in which the trend was rising were followed by extended periods in which the trend was falling. Downtrends started to get shorter & shorter in the 90s and outside of the bursting of the internet bubble  (2000-2002) and the Financial Crisis (2007-2009) that has remained the case. Even the COVID crash came and went so quickly that a down-trend hardly had time to emerge. Outside of the two episodes in the 00s, the current downtrend is proving to be the most persistent since the late 1980s. Investors that have been conditioned to quick downside...