From the desk of Willie Delwiche.

The broker-dealer index (XBD) has eclipsed its August high and almost back to even on the year. Relative to the S&P 500, XBD has broken out above its early 2021 peak and is now at its highest since 2008.     

Why It Matters: Seeing uptrends in areas outside of just the Energy sector suggests rally participation may be expanding. This gives investors who can move beyond just the indexes more opportunities to lean into strength. But the broker/dealer group isn’t just any group. It’s typically seen as a leading indicator for the S&P 500 overall. Relative strength from this group is good for the market overall and says encouraging things about overall risk appetite.      

Last week’s 5.9% rally in the S&P 500 was the best single-week gain since June but it was not enough to shift any of the criteria on our Bull Market Re-Birth Checklist.

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.

Dollar Strength Erodes

Sentiment, volatility, and momentum thrusts have all suggested an end to the US dollar wrecking ball. Now price action is confirming the data as the DXY resolves lower from a pennant formation to fresh multi-month lows. From a weight of the evidence standpoint, the dollar is done, and so are the accompanying headwinds for risk assets.

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.

From the Desk of Willie Delwiche.

Time for A New Driver

Priced in their own currencies, more than half of the countries in the world are trading above their 200-day averages. The US is not among them. 

This is the video recording of the November 10th, 2022, Weekly Town Hall w/ Willie Delwiche.

11/10/22 2:00 PM ET

From the desk of Willie Delwiche.

The number of issues that traded on the NASDAQ in any given week just prior to COVID was somewhere around 3500. Last week 5500 issues traded on the NASDAQ.   

From the desk of Willie Delwiche.

Going back to 1950, the S&P 500 has always always been higher one year after midterm elections than it was on election day. But over the shorter-term, the market has had a more mixed reaction to the votes being cast and counted.     

Why It Matters: Investors are looking for a catalyst that could help 2022 finish on a more positive note and allow 2023 to begin with some positive momentum. There is no denying the historical pattern for stocks to rally in the wake of midterm elections. No doubt there will be pockets of strength in this cycle as well. Some of the dominant themes that have been present already in 2022 (e.g. more volatility than strength and a deteriorating liquidity backdrop) argues for seeing evidence of strength before embracing the pattern.     

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.

Equal Over Cap-Weight

The equal-weight S&P 500 (RSP) emerged to fresh multi-year highs relative to the cap-weighted S&P 500 index (SPY). Seeing this ratio break out of a multi-year base is a development that indicates a healthy expansion in participation and is further evidence of improving market internals.

The S&P 500 was down last week but remains above its June lows and below its August highs.

More Context: We can look up at the summer highs on the S&P 500, but as long as more stocks are making new lows than new highs the risk is that it is the summer lows that are in jeopardy of being broken. The degree and duration of downturns since 2015 has varied but a clear pattern has emerged: rallies are difficult to sustain if fewer stocks are making new highs than new lows. Clearing the August high for the S&P 500 likely means seeing the NYSE + NASDAQ new high lists getting longer than the new low list (which has happened only twice in the past 50 weeks).   

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:

From the Desk of Willie Delwiche.

Rules Need Application To Be Useful

Market legend Marty Zweig was known for his investing rules. The first among them addressed the importance of staying in harmony with the underlying trend in the market. Good rules are great guides - we ignore them to our own peril.