Is there anything more important than the US Dollar?

They keep fighting me on it, but the market keeps proving them wrong.

It's the Dollar stupid!

The list keeps on growing.

A month ago there was only 1 sector trading above its 200 day moving average.

Then a couple of weeks ago, there was a second.

And now there are 5:

You certainly see it in life - the losers usually continue to lose. And winners win.

It's the same thing in the stock market. Winners tend to keep on winning, and the losers remain losers for a reason.

With the whole ESG scam unraveling over the past couple of years, the market has voted with their dollars.

That's what pays.

Not cute bed time stories. Actual Dollars.

Forget the narratives. I want to know what investors are ACTUALLY doing.

And as we have documented here consistently, the voting dollars are being used to buy Energy.

But I continue to be impressed with the strength in Energy stocks, despite the correction we've seen in Crude Oil Futures.

Look at that relative strength:

How do we know if we're in a bull market or not?

Generally speaking, more stocks are going up than going down in bull markets.

And sure, there are a lot of different ways to quantify it, but this is really the gist of it: Are more stocks going up or are more of them going down?

It really is that simple.

Where is the defensive rotation?

I was told US Stocks were in a bear market.

For those keeping score at home, the NYSE new lows list peaked in June. That was over 4 months ago.

But Consumer Staples have been underperforming since May!

I'm old enough to remember when stocks would go up for multiple weeks at a time.

They used to call those uptrends where I'm from.

So how about a 3rd straight week of gains for the Dow Jones Industrial Average?

That's something you don't see every day:

I interrupt this bear market to bring you stocks that are going up.

While people are crying about their stocks going down, we're focused on the winners.

You know why? Because winners tend to keep on winning.

And losers? Well, we don't care so much for you. By definition, few people do.

Here's a stock making new 6-month highs this week.

You may have heard of it:

The Dow Jones Industrial Average is working on its 3rd straight week of gains.

In case you missed it, you have to see the look on Maria Bartiromo's face after I told her Friday that we're 4 months into a new bull market.

Priceless.

I think she was into it though. Check out the full clip on Fox Business here: Mornings with Maria

This weekend I published a note about how underrated I find the Dow Jones Industrial Average to be among traders and investors.

The Dow is not something I want to fight. In fact, I was specifically taught not to.

Make sure to check out some of my favorite Dow stocks to own right now.

But today I want to focus on sentiment. More specifically, the extremes in bearish sentiment and overall pessimism.

There are a lot of trends in markets that are worth paying attention to.

Remember, asset prices trend. They're not random.

We have the data.

So one major trend we want to make sure we're not ignoring is in Energy stocks relative to Technology.

Look at the ratio between them making new multi-year highs, yet the S&P500 weighting in energy is still less than 5% of the entire index. But Technology is still almost 25% of the index.

Is that weighting sustainable?

In bear markets you tend to get more and more stocks making new lows.

We haven't seen that.

In bull markets you tend to get more and more stocks making new highs.

We haven't seen that either.

So are we going to finally get that expansion in the new lows list?

Or are these meaningful divergences?

You know me by now, I prefer to look underneath the surface to see what's actually happening in the markets every day.

The headline number of, "What did the Dow do today" doesn't tell the full story.

I'm more interested in the performance of the individual sectors. Which types of stocks are leading and which ones are lagging?

When it comes to accumulation by institutions, it's easy for them to buy as much of the mega-caps as they want.

It's hard to leave your footprints with such massive market caps and liquidity levels.

In Small-caps, however, it's hard NOT to leave your footprints, especially for the largest financial institutions.

In bear markets you'll find that the majority of stocks are making lower lows and lower highs in price.

With basic arithmetic, we can call those downtrends.

Using that same math, in order for stocks to be in uptrends, they first need to stop making lower lows.

"They need to stop going down before they can start to go up", is how I learned it.

Going through my charts this weekend, I found this chart right here pretty interesting.

The last time Mid-caps, Small-caps and even Micro-caps made lower lows was almost 4 months ago: