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Expert technical analysis of financial markets by JC Parets

Breadth Thrusts & Bread Crusts: Looking forward to this year’s Surprise

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From the desk of Willie Delwiche.

March in Wisconsin (especially here in Milwaukee close to Lake Michigan) is a season of it being already and also not yet Spring. Depending on whether the wind is blowing out of the warm Southwest or coming at us right off of the lake, temperatures can swing dramatically. But the consistent warmth of the Sun heats the Earth and gets the soil ready for planting.

It’s one of the most exciting times of the year for me, full of promise & expectation. I’ve already been at work in the garden (the areas, that is, that are already receiving enough sunlight to soften the dirt). One of several changes in my life over the past year was last Fall’s rebuilding & re-arranging of the raised beds in our backyard. I’m excited by the new layout but it means more work getting them ready for planting. The beds are pretty barren at this point. Rhubarb and horseradish will soon provide some evidence of life, and I tried to work around the asparagus, so hopefully that survived. Garlic, unfortunately, did not get planted.

[Read more…]

When In Doubt, Get Smaller

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There are times to make money in the market and then there are times to keep your money.

In sports you play offense and you play defense.

Offense sells tickets, but defense wins championships.

That’s how I learned it. [Read more…]

Filed Under: ASC

[PLUS] Weekly Macro Perspectives – Disruptions Strain System

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From the desk of Willie Delwiche.

Key Takeaways:

  • Even with stimulus, the economy on a bumpy road
  • Bottlenecks testing the resiliency of recovery
  • Despite stress points, growth heading in a favorable direction

Apparently, there is a ship stuck in the Suez canal. Pictures show the “Ever Given” container ship turned sideways in the narrow waterway, with its bow wedged on one bank and its stern close to the other bank. This ship, according to the Wall Street Journal, is one of the largest in the world. It’s 400 meters long (longer than the Empire State Building is tall) and can normally move 20,000 containers. In the current situation not only is it not moving its 20,000 containers but has ground to a halt all traffic in both directions in one of the world’s busiest waterways. On average, 55,000 containers travel through the canal on a daily basis, in addition to numerous ships carrying oil and liquified natural gas. The goods are there, but they are not moving.

[Read more…]

[Options] Settle Down, Interest Rates!

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We’ve seen quite a move lower in $TLT (which moves inversely to interest rates) since this summer.

Is the bottom in?

My crystal balls says: “Don’t ask me stupid questions.” So, that’s no help.

But here’s what I know:

  • Implied volatility priced into $TLT options is relatively high, though declining from recent high levels.
  • We have a clearly defined level (of perhaps temporary) support at $133.
  • High volatility gives us the ability to short options and gives us plenty of room to be wrong and still make money.

The bet I’m making is $TLT is going to chop around in a bit of a range over the next 2-6 weeks and this will cause volatility to contract.

So here’s how I’m going to play it:

[Read more…]

RPP Report: Review. Preview. Profit. (03-23-2021)

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From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

We continue to reiterate the same themes and pillars that support our bullish macro thesis. This would include an abundance of evidence pointing to risk appetite, rising developed market yields, strength from commodities, and of course the ongoing rotation toward cyclicals, value, and international stocks, among others…

Just about anywhere we look, we’re seeing investors gravitate further and further out on the risk spectrum.

At the same time, some of the former market leaders have retreated since February and are currently hovering near key levels. Similarly, even the markets’ more recent leaders have shown signs of weakness the past few weeks as some have violated critical tactical levels while others are consolidating at logical levels of resistance.

We’re seeing this both in the US and abroad… and not just in Equity Markets, but also Credit and Commodities. Even many of the risk-on FX pairs we watch have rallied back to key former highs, a very natural area to see sellers step in.

In this week’s report, we highlight some of the most important charts and corresponding levels we’re currently focused on. As long as our risk levels remain intact, so does our “bullish risk-assets” thesis. On the other hand, if we start to see more and more of these key levels give out, we’ll have to re-evaluate things.

[Read more…]

What is a Bear Market?

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Bear Markets are environments where a majority of stocks are falling in price for a prolonged period of time.

Sometimes you’ll hear lies about a 20% decline defining such things, but that’s just bullshit.

The number 20 is a completely arbitrary number that has absolutely no meaning. Thinking it does is foolish. Why 20? Why not 19.5? or 20.2?

There is no reason. They’re just lies.

If you ever hear anyone say that, “A bear market is when it falls 20%”, you know it’s because they’re in the entertainment business, not in the truth business.

Stay away from those kinds of people. They’re not here to help.

It’s their job to distract, it’s our job to ignore.

In reality, expansions in the new low lists are things you’ll find near the beginning of market declines. You’ll see spikes in these lists that haven’t been seen in years.

Here’s what this looks like coming into the week. It’s still a ghost town: [Read more…]

Filed Under: ASC

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