Since the Summer of of last year, the relationship between growth stocks and value stocks has been ironing out what traditionally might be considered a major topping pattern. This would suggest that value stocks should outperform growth moving forward. Last month, however, this ratio confirmed what looks to me like a failed breakdown and bullish momentum divergence. In my experience, this is an ideal recipe for a squeeze higher in the spread. [Read more…]
[Premium] Here’s The Deal With Bank Stocks
When you talk about the “stock market”, there is so much more to it than the S&P500 or what the Dow did on a given day, week or month. These are just 2 popular indexes in the most popular country in the world. But in reality, that’s all they really are. One of them, the S&P500 is cap-weighted, so the biggest companies in the world, $AAPL $FB $XOM etc, drive the direction of the index. The other, the Dow Jones Industrial Average, is made up of just 30 humongous American stocks. That’s what these things are.
The actual stock market, or “market of stocks”, includes many more stocks and indexes, not just in the U.S., but globally. Today I want to talk about what we’re seeing out of the Financials in Europe and what the implications of the recent behavior might be. [Read more…]
BNN Appearance: It’s Not About Being Right, It’s About Making Money
This week I was over at the Nasdaq in Times Square discussing the current market environment with Frances Horodelski on Canada’s Business News Network. The weight of the evidence is suggesting a cautious stance up here after all of our upside targets have been hit in recent weeks. Remember, we’ve been bullish stocks, globally since late January, and in the U.S. since early February. When our upside objectives are hit, it’s time to reevaluate. That’s what we’re doing now. [Read more…]
Why We’re Back To Tactically Fading Strength
From the desk of Thomas Bruni @BruniCharting
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The weight of the evidence has been building in favor of the bears over the last week or two, making the US equity weakness this week anything but surprising. Throughout the duration of this post I’ll outline the evidence that I’ve been noticing over the last two weeks and what it means for us as market participants moving forward.
Yen Strength – The Yen broke out structurally late last year and hasn’t looked back since. Tactically my upside targets were hit this week, but structurally this market has a lot more room to run. Given the high negative correlation between the Yen and US equities, this should continue to be a headwind for equity markets going forward. [Read more…]
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- At What Levels Do We Want To Be Short The U.S. Stock Market?
- Gold vs S&P500 – What Side Are You On?
- The Trade In Financials And Technology
- How Low Can U.S. Interest Rates Go?
- The Best Way To Profit From A Rising U.S. Dollar
- How Will This Yen Rally Impact Global Equities?
- Where Do We Take Profits In Biotechnology?
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- What Do We Do With The U.S. Indexes Now? S&P500, DJIA, etc
- The Best Trade In Precious Metals: Gold & Silver
- About That Squeeze Higher in Chinese Stocks
- My Favorite Energy Trade Today
- What Are We Going To Do About This Messy Bond Market?
- The Best Tech Stocks: Apple, Microsoft, Google or Facebook?
- What Does The Weight-Of-The-Evidence Suggest About Risk-Appetite?
Why It’s Time To Buy The Brazilian Real
From the desk of Thomas Bruni @BruniCharting
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From late January until today, there have been tactical breakouts in currencies of countries with significant commodity exposure relative to the US Dollar. This has provided a tailwind to a number of emerging market equities that have subsequently followed through to the upside. Many of these equity markets are concentrated in Latin America, but areas like South Africa, Africa, Australia, and Turkey have benefited as well.
Whether or not these tactical moves will continue and develop into long-term trends is entirely unknown, but the risk/reward in the US Dollar/Brazilian Real looks particularly skewed in favor of the bears here. [Read more…]
[Chart Of The Week] Why The U.S. Will Continue To Underperform Emerging Markets
One of the best ways to be positioned over the past 2 months has been to be in Emerging Markets, not in U.S. Stocks. I’ve been pounding the table on this trade since January and it has really worked out in our favor. The big question today is: Now What? Does this thing keep going, or does the longer-term trend of the U.S. outperforming Emerging Markets resume in the second quarter? [Read more…]
