This is the video recording of the June 17th Town Hall Meeting w/ Willie Delwiche
06/17/21 2PM ET [Read more…]
Expert technical analysis of financial markets by JC Parets
by Peter
This is the video recording of the June 17th Town Hall Meeting w/ Willie Delwiche
06/17/21 2PM ET [Read more…]
by Peter
From the desk of Willie Delwiche.
I planned on writing about how fishing is a great metaphor for investing.
But I’ll have to tackle that idea another day.
Today, I’m thinking about fishing not as a metaphor for investing, but as a metaphor for not investing — actively stepping away to preserve financial capital. Perhaps even more importantly, stepping away to rebuild mental capital.
Whether it’s casting for trout in Oregon or trolling for salmon in Lake Michigan, getting away from our screens and electronic gadgets and connecting with the water is clarifying and restorative. It’s not just about the catch…
Beyond fishing, it’s important to cultivate places where we can get away from it all, even if for just a few moments. We need to find places where we can set aside the active wrestling with trends and troubles. Places where we can catch our breath, clarify our thoughts, and reinvigorate our souls.
by Peter
From the desk of Willie Delwiche.
Key Takeaways:
2020 was a remarkable year in many ways. The rally that emerged off of the early year lows was broad-based and historically strong. It was fueled by numerous momentum surges, overwhelming amounts of fiscal and monetary liquidity, an unprecedented string of better than expected economic data, and a persistent trend in earnings estimates being revised higher. While 2021 began with some of those tailwinds intact, as we move toward the second half of the year, we want to avoid the assumption that nothing has changed as we have entered year two of the cyclical rally.
Breadth thrusts can signal strong and sustainable upward momentum for stocks that can last for up to a year. Our two favorite indicators are having 90% of stocks above their 50-day averages and/or 55% of stocks at new 20-day highs. These indicators last sent signals in late May and early June last year, and the breadth thrust regime from those signals has now expired. All of the net gains for the S&P 500 since 2010 have come during breadth thrust regimes. The path forward could remain rocky without another round of breadth thrusts.
by Peter
From the desk of Willie Delwiche.
Key takeaway: From a breadth perspective, the market is challenged right now by a scarcity of new highs. From a sentiment perspective, it has to contend with a scarcity of bears. Options data shows complacency even as risk appetites remain diminished. Bears on both the II and AAII surveys are near their lowest levels since 2018 and ETF inflows remain elevated. The household equity allocation tilt (versus bonds) is its most extreme since 1972. Stocks are loved, bonds are hated. All of this is very well summarized by our chart of the week from the Bank of America Fund Manager Survey which shows virtually no one is expecting (or prepared for) market volatility in the months ahead.
Sentiment Report Chart of the Week: Missing Bears
It takes bulls to make a bull market, but it takes bears to help sustain it. The Bank of America Fund Managers Survey found only 2% expect a correction >20% in the next six months, emphasizing the lack of pessimism amongst investors. An acceleration in a sentiment unwind could very quickly remedy this situation.
by Peter
From the desk of Willie Delwiche.
Key Takeaway: Index level highs lack support beneath the surface. Bonds rally in the wake of hot inflation data. Households own relatively few bonds, the Fed has never owned more Treasuries.
by Ian Culley
From the desk of Willie Delwiche.
After several failed attempts, the S&P 500 managed to make a new closing high on Thursday. The percentage of stocks making new 21-day highs (lower pane) did not expand as the index moved into record territory, but the percentage of stocks making new 21-day lows (upper pane) did. In fact, we’ve never before seen this many stocks making new short-term lows with the index making new all-time highs. This is not the sort of beneath the surface action you tend to see when a market is gaining strength for a sustained rally. Rather, it speaks to a continuation of what we have seen of late – a choppy environment where less is more and cash on the sidelines is good for both mental and financial health.
by Peter
This is the video recording of the June 10th Town Hall Meeting w/ Willie Delwiche & JC Parets
06/10/21 2PM ET [Read more…]
by Peter
From the desk of Willie Delwiche.
My colleague Sean shared a quote on Twitter recently about reading books and the discipline of not necessarily finishing one just because you started it.
There is a tension there. Working through a challenging read can be great. Trying to get through a book that isn’t worth your time or is inaccessible to you is not a virtue. Discerning when to persist and when to give in is a skill.
I look at this situation through a slightly different lens. A book worth finishing is worth multiple reads. For me, this means going over it enough that I can remember, access, and share the perspective. Too often we treat books as trophies on a shelf. Owning a book doesn’t mean we have ownership of what the book says. If we are not going to take ownership of the content, why own the book?
We don’t want to clutter up our charts with meaningless indicators, so why would we clutter up our shelves with books that are outside our grasp?