From the desk of Steve Strazza @Sstrazza

Gold (GLD) broke out of a multi-year base last year and has more or less been trending higher since. No new news there.

But as JC explained in a post last week, Gold Miners (GDX) have finally broken out of a 7-year base as well after recently taking out resistance at key prior highs.

Today we're going to take a deeper look at the space.

We love setups like the one in Gold Miners right now. Not only did GDX resolve higher from a massive base but there is also a hefty amount of price memory at the breakout level which should act as solid support going forward.

Click on chart to enlarge image.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 1, 2020:

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

This week we're highlighting the underperformance from the US using our Global Index and International ETF tables.

Click table to enlarge view.

Despite the Wilshire 5000 (DWC) closing slightly higher on the week, all major Large-Cap averages in the US closed lower. While equities sold off across the board to end the week, the Eurozone still managed to book a nice gain with the German Dax (DAXX) and Stoxx 50 (STOXX) up 4-5% each in what was a short week for much of the region.

The Nikkei 225 (NI) and Shanghai Composite (SSEC) each closed almost 2% higher in what was also a short week for much of Asia.

Here is an update to our Bull Market Checklist of 20 Items.

*Note: The Sensitivity column represents how close the asset is to the risk level in question

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, April 24, 2020:

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

This week we want to highlight the continued divergence between Energy stocks and Oil using our Sector and Industry ETF and Commodity tables.

First, let's look at some of the longer-term leaders. Biotechs (IBB) just broke out to fresh multi-year highs and are one of the top performers on our Industry ETF list across all timeframes.

Aside from Gold Miners (GDX), they are the only industry on our expanded list of over 50 ETFs already back at fresh 52-week highs. Definitely some relative strength worth paying attention to in these areas.

Be sure to read our recent post on Gold Miners.

From the desk of Steve Strazza @Sstrazza

Yesterday I wrote a post about deteriorating market internals. I discussed breadth divergences as well as the lack of confirmation of the S&P 500's recent highs from many important sectors and indexes.

In this post, we're going to focus specifically on the Large-Cap Sector SPDRs that failed to make higher highs and are showing early signs of cracking. To no surprise, these are some of the most cyclical areas of the market including Industrials (XLI), Financials (XLF), Materials (XLB), and Energy (XLE).

This speaks to the lack of risk-appetite we continue to see not only within equities but across all asset classes right now.

You can see the first three sectors in the chart below. With Crude Oil futures crashing below zero this week, we think it's prudent to stay away from the Energy sector until the smoke clears.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

Bonds are on the move once again, so we're updating our risk management levels and targets.

Additionally, we'll revisit the ratios to analyze which credit quality and duration characteristics remain in favor.

From the desk of Tom Bruni @BruniCharting

It's been a while since our last post on Canadian stocks, so today we're going to take a look at the trends that matter and the related trends.

Post #1 of  2 focuses on sector relative trends.

Post #2 of 2 focuses on the absolute trends and stocks we want to be buying and selling.

In our first post, we talked about relative performance in Financials rolling over aggressively. On an absolute basis, the TSX Capped Financials Index is stuck below its December 2018 lows and 2015 highs, much like US Small-Caps, the German DAX, Euro Stoxx 50, and many of the other weakest markets out there. As long as prices are below 263, the bias is to the downside with a target near 210.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

It's been a while since our last post on Canadian stocks, so today we're going to take a look at the trends that matter and the related trends.

Post #1 of  2 focuses on sector relative trends.

Post #2 of 2 focuses on the absolute trends and stocks we want to be buying and selling.

First, let's start with the TSX Capped Financials which represent 33% of the TSX Composite. This chart has spent the last four years putting in a major top and the underperformance looks likely to continue. From that perspective, can the TSX Composite continue to work sustainably higher if its best players are underperforming so drastically? I'd argue no.

Click on chart to enlarge view.

From the desk of Steve Strazza @Sstrazza

We turned bearish on equities in February from a structural standpoint and have been tactically positioning ourselves in both directions since. We've taken advantage of the bifurcated market we're in by continuing to find opportunities on both the long and short side. Right now we believe the near-term risk is to the downside in equities.

How defensive should we be and what will it take for us to turn bullish again?

Last week we put together a list of key levels that we want to see certain assets hold before turning bullish on stocks over any longer-term timeframe. We're using this as our risk gauge for now.

As promised, we put that list into a table so that we can easily track and update its progress. Let's dive in and see what the weight of the evidence is telling us right now.

From the desk of Steve Strazza @Sstrazza

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

As this is something we do internally on a daily basis, we believe sharing it with clients will add value and help them better understand our top-down approach. We use these tables to provide insight into both relative strength and market internals.

This week we want to highlight our US Equity Index and Industry tables as they illustrate an important resumption in leadership from the market's most resilient areas.

Click on table to enlarge view.

From the desk of Tom Bruni @BruniCharting

In late February we were shorting Sugar aggressively and captured a good portion of its sharp move lower.

Now we're looking at another sweet setup in the Sugar market.

From the desk of Steve Strazza @Sstrazza

Today, we put out a post outlining why we are bearish on Small-Cap stocks and want to be shorting the Russell 2000 ETF (IWM). Read it here as it sets the stage for this post.

Small-caps are the weakest area of US Equities. That's why we are expressing our bearish view on stocks via the Russell 2000 as opposed to one of the large-cap indexes, all of which the Russell has severely underperformed for several years now.

In line with our top-down approach, we don't just want to short an index. We are believers that playing the averages results in average returns.

For this reason, we've drilled into the Russell 2000, looked at every single chart and picked out the weakest names we could find with clearly defined risk management levels to limit us to the smallest of losses in the case these names mean-revert higher.