Every week we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Being Independence Day weekend, we're going to highlight the continued structural outperformance from the US vs rest of the world in this week's post. As a good patriot and technician, I would be remiss not to take this opportunity to reflect on how grateful US investors should be.
Here are our US Index ETF and Global Index tables.
We haven't talked much about Real Estate $XLRE lately because there really hasn't been much to say. Over just about any timeframe, it's underperformed the S&P 500 $SPY, which we'll illustrate with a ratio chart below.
Price is basically unchanged over the trailing year. The only sectors that have performed worse are Industrials $XLI, Financials $XLF, and Energy $XLE. This is not a group you want to be associated with.
Looking at the chart, you'll notice it's gone nowhere for much longer than just the past year. XLRE has actually been chopping around in a messy range for the better part of four years now!
This is the third edition of our new "Under The Hood" column. Read more about it here.
We are already getting positive feedback on this new strategy from "Mr. Market" as both of our trade ideas from last week's post are now in the top 5 of this week's most popular stocks (measured by the net increase in ownership, week-over-week).
In other words, Robinhood investors have been buying these names hand-over-fist since we wrote about them last week. They've been rewarded for it too as they've both performed very well.
Workhorse $WKHS has really lived up to its name as it hit our price target in a matter of days, and then went on to double again from there. The stock is up about 4-fold since it broke above our risk level near 5 early last week.
Here is a look at the updated chart, with the same exact annotations from last week's post.
What's with all this talk about weak breadth lately?
A lot of market participants have been pointing out the divergences or lower highs in popular breadth indicators such as the percent of S&P 500 stocks at new 52-week highs or the percent above their 200-day moving average.
In many cases, these actually aren't divergences at all as the S&P is yet to make a new year-to-date high itself.
Just like we look at different breadth indicators to identify market tops than the ones we look at to signal bottoms, we should use different items in our breadth toolkit depending on the market environment we're in.
Using the current rally as an example, it makes little sense to give weight to the percent of stocks making new 52-week highs considering most indexes and sectors haven't been able to achieve the same.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
On the other hand, cyclicals and Value were already hurting coming into the year and then endured serious structural damage during the Q1 crash. If you've been invested in these areas, particularly those groups directly impacted by Covid-19, it might just seem like the "worst of times."
When going over some of this week's content ideas with JC, I told him "I can't possibly write another post about Tech stocks, but I want to."
His response was simple: "That's information."
In other words, based on the thousands of US Equities charts I'm looking at each week, the strongest uptrends continue to be in Technology $XLK. The fact that it almost seems too good to be true, or that I feel like I'm beating a dead horse about "tech, tech, and more tech" - is all the more reason to remain bullish.
We can't change the fact that there's a lot of good stuff going on in the space right now. We can only interpret the data in front of us, and right now, it's saying we should keep buying Tech.
Last week, we introduced our new weekly column called "Under The Hood." You can read more about it here.
Basically, we are looking at a universe of the most popular stocks on Robinhood measured by the net increase in accounts holding them week-over-week. Then we're drilling into the charts to find opportunities to either join in and ride the momentum in these names higher, or bet against those that get too frothy.
Here is this week's list. It represents the top 60 stocks that experienced net increases in ownership among Robinhood users last week. We've also included their weekly performance.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
Every week we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Despite some volatility in the second half, risk assets continued their steady march higher last week. The broadening participation from Equities was again evident as every major US and Global Index was higher with the exception of Dow Utilities $DJU.
We've written extensively about the strongest areas and those first to reclaim their highs. In this post, we'll highlight a handful of Equity ETFs/Indexes which are at or just beneath fresh highs. Whether these areas work through their overhead supply or get rejected at these key levels will provide important information into the strength and durability of the current rally.
Let's dive right in and take a look at our Sector SPDR ETF table.
A few week's ago we profiled the strength in Biotech and highlighted the Genomics space as one of the top-performing industry groups. We said we were looking for some consolidation in these areas in the coming weeks and that if and when prices resolved higher these would be areas we'd look to for long opportunities.
In this post, we'll highlight our top-down approach to look into the Biotech space and offer some trade ideas. Then we'll drill further down into Genomics, provide an update on what we're seeing there, and share some setups in holdings of the ARK Genomic Revolution ETF $ARKG.
We talk a lot about the importance of secular leaders. More often than not these groups have a relationship to Technology, regardless of whether they are classified as a Technology stock or not. Tech is everywhere today.
The last time a sector was so pervasive would have to be Industrials way back in the mid-1900's. One could argue Financials had their time in the sun too, but that was short-lived and we all remember how it ended.
Industrials may not be as important as they once were, but they are still important.
