Market review 22.03.27
Hello everyone,
The last blog post was titled “Time to be broadly bullish.” This week, we got excellent follow-through. We’ll look today at some of the many charts that show this.
As the previous post covered a lot, I hope to keep these next several ones shorter.
Broad market
The ETF leadership board shows bonds (TLT) at new 52-week lows while Canada, materials (SLX, COPX), oil (XOP), and value stocks are making new 52-week highs.
Solar stocks have climbed out of the laggards area while uranium stocks are moving towards the leaders area. More on specific sectors later - first let’s look at global regions.
SPY Weekly. Like the NYA chart in the previous post, the S&P 500 had a failed breakdown. And it inched higher this week.
It’s not just US stocks that look great.
Several developed-country ETFs are breaking out. We already looked at Canada in the past few posts, but here’s the UK (EWU). Similarly, Japan (DXJ) and Norway (ENOR) have made breakouts.
How about emerging markets? Ditto. Here’s Mexico (EWW) with a breakout. See also weekly charts for Columbia (ICOL), South Africa (EZA) and the Gulf Region (UAE, QAT, KSA).
DAX Monthly. The German DAX is forming a strong reversal candle off 5yr support. The EWJ monthly chart is sporting a similar look. There’s still 4 trading days left in the month so let’s revisit this next week.
Industrial Materials
As we saw on the ETF leadership board, one of the strongest parts of the market right now are industrial materials. SLX, REMX, and COPX weekly charts are all making breakouts.
Zooming out with monthly candles, this PICK chart looks very beautiful (like the SLX monthly chart that I’ve been sharing for the past several quarters).
Clean Energy
We looked at the solar ETF (TAN) in the last post. This week, CCJ (the largest uranium producer and sector leader) made a breakout.
PWR Weekly. Nice follow-through after a recent breakout within a strong uptrend. This is a company involved with the design/build of electric power generation and transmission systems. In a past life, I’ve worked with them.
Tech, crypto and others
Tech leadership remains very thin, but PANW and GOOGL are some of the names that I’ve been discussing for a while as standing out. This week, PANW made a breakout. See why we follow leaders?
More speculative parts of the market (crypto, weed, meme stocks) have been showing nice strength. Risk appetite is back.
Media links
Last week, I touched on valuations & macro. If these topics interest you, you might find these recent podcasts useful:
Infinite Loops Podcast, Episode 91 (link):
What makes a bubble and what markets might currently be in one
What trading edge(s) are the least likely to be arbitraged away
LePoidevin Group webinar (link):
How rising rates affect asset classes
Why we compare earnings yields to bond yields
Why the 10y-3m is the yield curve spread that matters
Closing Notes
We got excellent follow-through this week to our bullish view of stocks. Global regions and many sectors are breaking out.
Retail sentiment is coming off levels of extreme pessimism. Meanwhile, commercial hedgers have closed their short position in stocks and are now net long. I also noted last week how this group already had some of their lowest positions in risk-off vehicles (VIX, USD, GLD).
That’s all for this week! Thanks for reading.
Twitter: @alphacharts.
Important Disclaimer: This blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.