Market review 23.03.26

The market’s message and seeds for the next rotation

Hello everyone,

A quick note:

I want to express how grateful I am to those of you that signed up to this newsletter in the past week! Thank you for the support.

For those sitting on the fence: Over the next 2 weeks only, I am offering 15% off and you’ll be grandfathered in at this pricing. Please use this link to sign up (existing members can get this discount by simply resubscribing).

And now, on to the weekly market review.

The market’s message

The crew over at StockCharts.com is a great bunch.

Back in 2014, I attended their ChartCon event in Seattle. Among the speakers were legends: John Murphy, Alex Elder, and Martin Pring. Over 20 presenters took stage and covered everything including relative strength, stage analysis, intermarket analysis, seasonality, and psychology.

I remember catching John Murphy after his talk and seeing if he shared my optimism on gold miners. He certainly did not. It took me some time to realize that there’s a huge difference between telling the market what to do vs. listening to what the market is saying.

There must’ve been over a thousand people in attendance – I loved the energy. You get to meet lots of driven, curious people and hear about how they approach markets, their successes and of course struggles. This new trend towards webinars just isn’t the same.

Gatis Roze did a 1-hour presentation in which he ripped through over a hundred charts. It was all great info, but I remember feeling a little overwhelmed by the end of it (hence why I limit these blog posts to under 15 charts). But right after, Julius de Kempenaer took the stage. The first comment he made was:

“You can look at a thousand charts, or just one.”

My ears perked up.

Julius is known for his Relative Rotation Graph (RRG). It lets you visualize the leadership of the market at a quick glance, and then you can focus your time analyzing prices charts for the areas that stand out. The interactive RRG can be found here.

Years later, RRG was partly what led me to make my own leadership board. It currently is sitting like this:

This chart continues to give a clear message: tech and gold are leading, while banks, oil, agriculture, and some industrial materials are lagging.

A very similar picture can be seen below for stocks within Canada’s TSX-60 index. Again, gold is leading while oil & banks sit in the penalty box.

If I were to show just one price chart that summarizes the shift we’re seeing, it’s this one with TNX and DBC both breaking down:

As I discussed last week, the market’s leadership is being driven by the macro message of inflation and interest rates easing.

It’s also the complete opposite of last year, when it paid to avoid tech, bonds, and gold while being long energy from Jan-Oct ‘22:

When the transition was happening late last year, I began in Dec being broadly bullish. Then in recent weeks and months, I gradually moved to being bullish just tech, bonds, and gold – as documented on this blog.

Now let’s look at current setups of interest, before looking at the seeds of the next rotation.