From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
One of the most frustrating questions plaguing investors at the moment is... "How long will this choppy environment last?"
And one question we’re asking internally is… “What is with all these mixed signals!?”
Once the latter clears itself up, we'll have our answer to the former... But not until then.
When the outlook becomes increasingly murky, the best action is to take a step back, let the smoke clear, and weigh each new piece of evidence as it becomes available.
For now, the most important evidence we have is our list of risk-on commodities and equity indexes testing critical levels of interest grows larger by the day.
There seems to be no end in sight. Complicating matters further, we’re actually seeing this kind of price action throughout the risk asset landscape. It's not isolated to a single asset class or region. We're seeing it in Stocks, Bonds, Commodities, and even Currency Markets... and not just in the US, but also abroad.
Welcome to our latest RPP Report, where we publish return 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.
You can consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes as well as discuss the most important themes and developments taking place in markets all around the world.
While the weight of the evidence remains in the bull's favor, we continue to see more data arrive that suggests the environment could be shifting toward one that is less conducive to risk assets, at least over shorter timeframes.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying stocks as they climb the market-cap ladder from small, to mid, to large, and ultimately to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.
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.
We've already had some great trades come out of this Small-Cap focused column since we launched it late last year and started rotating it with our flagship bottoms-up scan, "Under The Hood."
Ultimately, to make the cut for our Minor Leagues list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort by proximity to new highs in order to focus on the best players only.
Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to longer-term minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.
We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
Today, we're going to discuss an Industrial conglomerate and well-known household name, as well as one of the largest Natural Gas companies in the world.
Not only are these stocks in some of our favorite sectors right now, but both are currently flirting with reclaiming key former highs. They also offer clearly defined risk levels to trade against, in addition to profit profiles skewed heavily in favor of the bulls.
We'd be remiss not to share these setups with you, so let’s dive right in and look at them…
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying stocks as they climb the market-cap ladder from small, to mid, to large, and ultimately to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.
In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."
We write a post every other week where we outline some of our favorite setups from this universe of stocks.
We've already had some great trades come out of this column and couldn't be happier about the early feedback.
Moving forward, we'll be rotating this column with "Under The Hood" each week.
Ultimately, to make the cut for our Minor Leagues list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort the stocks by their percentage from new highs. Easy done.
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.
In recent weeks, we've seen some rotation back into Large and Mega-Caps, which has propelled the major indices to new highs, while SMIDs are still resiliently consolidating. While the list of negative data points has grown, it's still not close to anything that warrants concern.
Public investors finally have opportunities to gain exposure to the exciting new Space Exploration industry.
We've seen a handful of new pure-play Space IPOs and SPACs hit the market this year. Most recently one of our favorite fund managers, ARK Invest joined the party and launched their own thematic Space ETF, $ARKX.
There's obviously a ton of hype surrounding this emerging theme right now. But is this industry, in its current form, worth investors' time?
