Seasonality of markets is something I've done a lot of work on throughout my career. As humans who are part of society, we behave differently depending on the seasons. We dress differently, we hang out with different people, we go to different places, all according to a calendar.

If you think those behavior changes don't impact our decision making, then I don't think you understand humans. And if you think those behaviors and decisions don't affect how we participate in markets, then I think you're just being naïve.

I encourage you to pick up a copy of the annual Stock Traders Almanac published by my pal Jeff Hirsch.

Yesterday after the close, I had a great chat with Ed Clissold, the Chief U.S. Strategist at Ned Davis Research. The podcast episode will be up shortly, so keep an eye out for it. You can subscribe to my Technical Analysis Radio Podcast here, if you haven't...

From the desk of Willie Delwiche.

Key Takeaway: It appears the bulls are preparing to pack it up and call it a day. Dark clouds are starting to roll in, as the slow deterioration beneath the surface has taken its toll. New highs and a relentless rally in the major indexes paint an alternate reality versus the experience of the average stock--a reality that hasn’t quite sparked the interest of the bears so much as it’s exhausted the bulls. Active investment managers continue to taper their exposure, and advisory services have turned their least bullish in more than a year. A storm is brewing in the form of a re-set in sentiment. As it inches closer, the question becomes more of “when” and “how,” not “if.”  

Sentiment Report Chart of the Week: New lows in new highs

Indexes are making new highs, but beneath the surface the case for more caution on the part of investors makes more sense. There are many ways to describe the deterioration that’s been...

This week I had a chance to chat with my old pal Phil Pearlman, who's the Chief Behavioral Officer at Osprey Funds.

Phil and I have been talking markets regularly for over a decade, both behind the scenes and on YouTube.

Never in our wildest dreams did we think we would be here today discussing on-chain analysis of crypto currencies. But here we are!

In today's video we discuss two of my favorite gauges of sentiment, the exchange balances and the dormancy rates. We also touch on the current breadth in crypto markets as the percentage of coins breaking out to new 30 day highs continues to expand.

Crypto just once again pierced a whopping $2T market cap.

It seems now more than ever that the entire space is heating up to unseen levels.

The entire asset class has ballooned to nearly 10,000 coins and tokens, all with their own individual whitepapers, goals, and communities.

Activity on the blockchain has never been higher, smart contracts and DeFi are in full swing, and now the world is beginning to pick up what NFTs are all about.

But it wasn't always like this.

All of this activity flourishing before our very own eyes stands on the shoulders of failed projects, countless crashes, and the destruction of wealth in now dead tokens.

If this asset class has taught us anything, it's to manage your damn risk.

It doesn't matter how unique the whitepaper is or the fundamental use case of the token if the market's truly coming off.

It was hilarious to see everyone talk about the fundamentals of their altcoins when things were great earlier in the year, but tried becoming technicians on the way down.

Classic market...

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Steven Strazza @Sstrazza

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be any security, in any asset class, on any timeframe. Sometimes, it’s an absolute price chart. Other times, it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.

While you can try to guess the chart, the point is to make a decision…

So let us know what it is… Buy, Sell, or Do Nothing?

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The market has been a choppy mess for months. 

Unless you’ve been stuck under a rock or at the beach all summer, this is old news. And we’ve admittedly been a bit obnoxious when it comes to rehashing this theme. But usually when we find ourselves harping on something, it's because it's a big deal.

Our own behavior can be fantastic information, and it's become a part of our process to pay special attention whenever we begin to repeat ourselves a lot.

This week is no different, as the US Dollar Index $DXY provides another example of the market’s sloppy state of affairs.

Just when we thought we might finally have some decisive price action in the Dollar, Friday’s attempted breakout followed by Monday’s weakness is casting some serious doubts.

Was last week’s breakout above the March pivot highs valid?

Or was it just another failed move to add to the market’s growing list of whipsaws and fake-outs?

Let’s take a closer look at the US Dollar Index to...

From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return tables for various 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 consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

In our last report, we pounded the table on our position that markets are a total mess these days. Another theme we hit on was how many significant risk assets were trading at or below critical levels of overhead supply.

In the time since, we saw bears try to take control of things once again, and as of Friday's close, it looked like they were finally doing so. But that changed fast as a lot of last week's...

From the desk of Willie Delwiche.

As we've still yet to see a decisive shift to a risk-on environment, caution remains the general guiding principle for this market. At the same time, there are opportunities in crypto that we'd like to take advantage of. 

In the Cyclical portfolio, we’re shifting domestic equity exposure from small-caps (IJR) to mid-caps (IJH). Small-caps have been stuck below a now-falling 50-day average for nearly two months, and our industry group rankings show small-cap groups losing relative strength versus both large-caps and mid-caps.

Two things to note in the Tactical Opportunity portfolio update - a change that is being made and one that is not being made. First, we’re putting some cash to work by adding a 5% position to Ethereum (ETHE). Breakouts are being seen across the crypto space, and we want to follow that strength. Second, we’re keeping our exposure to commodities (DBC) for now. We’re giving it the benefit of the doubt, as the longer-term up-trend remains intact.

From the desk of Willie Delwiche.

Key Takeaways:

• Emerging Market indexes weighed down by weakness at top.
• Europe & Middle East showing leadership.
• If China is finding a bottom, broad EM strength could support a sustained rally.

Here in the US, a handful of mega-cap stocks are pushing the indexes to new highs, while beneath the surface many stocks are languishing. The NASDAQ Composite began this week by making a new all-time high, but it was the first time in eight days that there were actually more stocks making new highs than were making new lows. The S&P 500 is trading in record territory, while nearly 40% of its stocks aren’t even above their 50-day averages. 

When we look overseas, what’s happening in Emerging Markets is the inverse of what we’re seeing within the US indexes. For EM, the weakness is at the top, in the countries that make up the largest weightings within the EM indexes. China accounts for more than a fifth of the weighting in EM indexes and is down nearly 15% over the past six weeks....

Anything gold-related has not had any fun 2021. I can only imagine the disdain gold bugs must be feeling as they watch governments print money around the world, all things crypto soaring, and all the while their precious shiny little rocks doing jack squat.

If you've been long gold, I'm sorry.

But there's good news...

JC and I were chatting yesterday about what appears to be an opportunity in the Gold space.

Maybe, just maybe, gold has found a short-term bottom? We're not going to go out on a limb and declare THE bottom, but recent price action suggests to us that a bounce might be in store. As such, we want to get involved for a quick little hit-and-run play.