From the desk of Willie Delwiche.

This All Star Charts +Plus Monthly Playbook breaks down the investment universe into a series of largely binary decisions and tactical calls. Paired with our Weight of the Evidence Dashboard, this piece is designed to help active asset allocators follow trends, pursue opportunities, and manage risk.

From the desk of Willie Delwiche.

From the desk of Willie Delwiche.

• Real Estate moved into the top spot in our rankings. It was one of four large-cap sectors to make new 52-week highs last week (the others were Consumer Discretionary, Health Care & Technology). No small-cap or mid-cap sectors made even 13-week highs.
• Financials have been short-term & mid-term laggards, with deteriorating conditions in Banks across market cap levels weighing on the sector.

From the desk of Willie Delwiche.

A DYNAMIC APPROACH TO PORTFOLIO MANAGEMENT

The number one question I have gotten from financial advisors over the course of two-plus decades in this business is “What should I do now?” The answer can sometimes be “nothing”, but it cannot always be “nothing”. Dynamic portfolio management is about finding the right balance between following existing trends and adjusting as necessary to new information. To do this we need to have a good grasp of time frames. Every investor has a timeframe. Every system has a timeframe. Finding harmony between the two helps provide the appropriate balance between action and inaction.

From the desk of Willie Delwiche.

I might be old school, but I like to look within the Financials sector for leadership trends that provide some clues for the path of the market overall. Specifically, I keep an eye on what Banks and Broker/Dealers are doing on an absolute basis but also relative to the S&P 500. The XBD bottomed versus the S&P 500 early last year and led the rally into Q1 2021. The BKX began leading a bit later, but its relative strength carried further into this year. Both now have rolled over and are moving lower versus the S&P 500. As we have shown recently, the XBD/SPX ratio tends to move with our risk on/risk off ratio and so a breakdown in the Broker/Dealer index may be a warning signal about the overall risk backdrop.

This is the video recording of the July 8th Town Hall Meeting w/ Willie Delwiche & JC Parets

07/08/21 2PM ET

From the desk of Willie Delwiche.

You guys need to come see this...

That’s what an excited neighbor told us after randomly knocking on our front door earlier this week. 

We followed her out to our yard by the sidewalk to find a trio of scientists readying to catch and study a pair of Cooper's Hawks that have been nesting in a tree across the street. They constructed a trap with a net stretched between a couple of poles and a distress call playing over a loudspeaker.

First, the female swooped in, followed by the male. The hawks were quickly entangled in the net and the scientists began to band and measure them.

From the desk of Willie Delwiche.

• The Energy sector fell out of the top spot in our S&P 500 sector rankings last week, though on an equal-weight basis and at the mid-cap and small-cap level, Energy remains the relative strength leader. Our industry group heat map confirms this broad strength within the Energy sector.
• Communication Services and Technology are in the top two spots of our relative strength rankings. Financials and Real Estate round out the leadership group.

From the desk of Willie Delwiche.

The S&P 500 finished June at its highest level ever. For the first time since August 2020, however, this was a new monthly high that was not confirmed by the equal-weight version of the index. Moreover, it was the first time since Sep 2018 that the equal-weight version of the index was actually down (ever so slightly) for a month in which the S&P 500 made a new high. This is evidence of a market that has lost some of the harmonies that helped sustain strength in recent months.