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 relative strength trends at play and preview some of the things we're watching in order to profit in the weeks and months ahead.

Like we discussed last week, Equity Markets are becoming more of a mixed bag, but there are still plenty of strong areas we want to be betting on.

We're back above the risk levels we've outlined in recent weeks for most major indexes and we believe the resumption in relative strength from former leadership groups such as the Nasdaq, Tech, and Growth has given us a heads up that the recent correction low is in.

With that as our intermediate-term view on Equities, this post will focus on the strongest areas of the market that we again want to be leaning on for long opportunities to express our bullish thesis in the weeks and months ahead.

Starting at the...

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 relative strength trends at play and preview some of the things we're watching in order to profit in the weeks and months ahead.

Our last RPP report took a deep look at the damage endured by the most important assets in the world during the recent selloff.

We held this report back a few days this week because the S&P just broke beneath our risk level and was in correction territory, down roughly 10% from its highs intraday on Monday. We wanted to see how things would shake out, and we're glad we did. Let's talk about it.

While many areas have held up quite well and are showing signs of a near-...

From the desk of Steve Strazza @Sstrazza

Something we discuss a lot, especially internally, is what we refer to as "New Dow Theory."

It's merely the idea that instead of looking at Dow Transports $DJT as the confirming average for Dow Industrials (or the broader market), we should be looking at the Semiconductors index $SOX.

The reasoning behind this is simple, and we won't get too far into it. The bottom line is that as the US has shifted from a Manufacturing to Services Economy, the methods used to transport modern-day goods and services are very different than they were almost a century ago when Dow Theory was first introduced.

If you feel like going down the rabbit-hole on this like I did, here'...

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 relative strength trends at play and preview some of the things we're watching in order to profit in the weeks and months ahead.

Our last RPP report took a high-level look at the initial damage endured by the recent selloff.

This past week, we saw follow through on that weakness. That means we’ve got to take a deeper look at how the most important assets in the world have held up.

For the first time off the March lows, we’re starting to see a change in character in the way that the market corrects. Particularly Equity Markets, so that will be our focus this week.

Ultimately, while the...

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 relative strength trends at play and preview some of the things we're watching in order to profit in the weeks and months ahead.

Last week, we followed up on some of the charts we recently cautioned were approaching overhead supply to see how they reacted to these critical levels.

Since we experienced a bit of a selloff on Thursday and Friday, this week we’re going to keep it simple and take a high-level look at some of the most important assets in the world and assess any damage that was endured...

...Spoiler alert: there wasn't much.

Where better to start than with US Equity Markets.

Click table to enlarge view.

...

From the desk of Steve Strazza @Sstrazza

Energy stocks and Crude Oil have been trending in opposite directions over the trailing three months.

We know these kinds of intermarket relationships can dislocate for extended periods of time, but some recent developments in the space have us thinking it may be time for this divergence to correct itself... and it's likely to come in the form of Crude catching down as opposed to stocks catching up.

In this post, we'll reveal this week's Mystery Chart and discuss what the recent action in Oil could mean for Energy stocks in the weeks/months ahead.

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 relative strength trends at play and preview some of the things we're watching in order to profit in the current market environment.

Last week, we highlighted a number of critical Stock Market Indexes and Sectors, as well as assets in the FICC Markets that were approaching logical levels of overhead supply.

This week, we're going to follow up on this theme and see how some of these charts have reacted to the critical levels we pointed out last week.

From the desk of Steve Strazza @Sstrazza

Thanks to everyone for the feedback on this week's Mystery Chart. We had a lot of good answers this week. Many respondents were cautious of the waning momentum but on balance, most of you were buyers. We are too.

It was a chart of the iShares MSCI Netherlands ETF $EWN which just broke out of a 13-year base to fresh all-time highs (shown below).

But it's not just the Netherlands making new record highs, the All-Country World Index $ACWI just made new all-time highs as well. There aren't many things more bullish than World Equity Indexes trading at their highest levels in history.

In this post, we'll highlight the positive breadth characteristics we're seeing within Global Equity Markets and outline trade setups in some of the strongest countries around the world- including the Netherlands, as a way to express our bullish thesis.

But first, here's why we're so bullish on International Equities in the first place. Check out these new highs for ACWI.

...

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 relative strength trends at play and preview some of the things we're watching in order to profit in the current market environment.

This week, we're going to highlight a number of critical Stock Market Indexes and Sectors, as well as assets in the FICC Markets that are approaching logical levels of overhead supply and pose the question... "Are risk assets due for some corrective action or consolidation?"

From the desk of Steve Strazza @Sstrazza

Thanks to everyone who responded to this week's Mystery Chart. Responses were somewhat mixed. It was a daily chart of the iShares Medical Devices ETF $IHI.

What we really wanted to know is whether or not investors are buying these kinds of bullish continuation patterns right now. Many alluded to the underlying trend being higher but still wanted to wait for the flag pattern to resolve before taking action.

This is a prudent approach and we're looking at the chart in a similar light. With that said, we're also viewing setups like this within the context of what is going on in other areas of the market. In other words, as more and more of these patterns resolve to the upside, which they are, the higher the likelihood is that others will follow their course.

In this post, we'll walk through our top-down approach to highlight why we like Medical Devices right now and then drill into some of our favorite setups as a way to express our bullish thesis.

Here is the chart. I've added a Fibonacci extension from the Q1...

This is the video recording of the August 2020 Conference Call.

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 relative strength trends at play and preview some of the things we're watching in order to profit in the current market environment.

This week, we're going to highlight the continued outperformance from offensive assets as well as the weakness we're starting to see from many defensive assets. This kind of action continues to suggest increasing risk-appetite and is supportive of higher prices within Equity and Commodity Markets.