We look at a variety of intermarket ratios that span just about every asset class in order to get a read on interest rates. Here is one that we don't discuss too often, but its relationship with the 10-Year Yield is obvious from looking at the chart below.
The S&P High Beta/S&P Low Volatility (SPHB/SPLV) ratio made significant lows around the same time and place as the 10-Year has several times over the past decade.
After another sharp move lower with dramatic blowups in Yes Bank and Crude Oil, let's revisit that thesis and discuss why patience remains the best course of action given current conditions.
In this report, we cover our Coronavirus Custom Index which is comprised of stocks we believe benefit from the coronavirus as well as a playbook to profit from these strong performers.
To be clear, we didn’t find these stocks looking for coronavirus plays, we found these through our ordinary process of scanning for relative strength. We were simply looking for stocks that have been bucking the trend during the recent selloff. With that said, it was hard to ignore the results when we thought about what these companies do.
Here is our All Star Charts Coronavirus Custom Index making higher highs and higher lows recently while the broader market squanders near bear market territory.
This is the big question going through the minds of market participants all over the world right now. What's next? Have we seen the worst of it? Or is this just the eye of the storm?
I remember as a kid I was 10 years old when a huge storm hit Miami. Hurricane Andrew was a massive category 5 storm that was supposed to hit Orlando but in the middle of the night changed directions and decided to make a beeline towards my house. So the eye of the storm actually went over our heads:
Yes Bank is in the news again and following an 83% intraday move to the downside, market participants are wondering what's next?
In this post, we'll outline why this week's move is business as usual for the stock, what we'd do with it now, and why the best trade in Yes Bank may be to avoid it altogether.
Today, we want to revisit the sector to see what's changed and what stocks we want to be buying and selling.
First, let's start with the Nifty Pharma vs Nifty 500 ratio chart that continues to turn higher after meeting our downside objective late last year. This continues to suggest further outperformance from the Nifty Pharma sector relative to the broader market.
My apologies if this one was a bit of a layup, but that was the point. You were all buyers and so are we. Since we're all in agreement let’s dive right in and talk about why we’re bullish on this chart but more importantly, why it matters.
If you're reading this it's probably because you've read our Table of the Week where we identified roughly 100 of the strongest stocks in the S&P 500. After digging into the charts of all these stocks, we came up with a handful of setups that we believe are currently offering the best reward/risk. Here they are, in no particular order.
We want to be buying stocks that are in the strongest uptrends. One way we identify them is by looking at momentum which we use the 14-day RSI for. The strongest uptrends do not get oversold, or fall to RSI levels below 30. In fact, the strongest uptrends often stay above the 40-50 level and constantly print overbought readings above 70.
The S&P 500 registered an extreme oversold reading below 20 during the violent correction that began in late February. Here's a look.
Today we wrote a post updating our market view, which is that we expect further chop but are looking to put cash to work slowly on the long side. In that post we outlined what we'd need to see to get aggressively long, so please check it out.
This post is going to outline several stocks that are presenting attractive reward/risk scenarios at current levels, so if you need long exposure this is where we want to be.
