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

I was talking to the team earlier this week and mentioned that I was having a hard time writing. Grant and Ian were quick to remind me that it's probably because "nothing new is happening!"

They were right. Until now...

We finally got a major resolution in what we consider one of the most important charts in the world these days.

I'm talking about the US 10-year yield reclaiming that critical 1.40% level this week. And this begs the question as to what a rising rate environment might mean for investor portfolios.

Well, one thing we know for sure is we want to stay away from bonds... unless we're shorting them.

But how do we want to position ourselves in the stock market if yields are breaking out?

It's simple really. Some stocks do better with rising/higher rates, while others thrive in markets characterized by low growth and low yields. If this is the beginning of a fresh move higher for yields, then we want to be focused on buying the stocks that are likely to benefit the most.

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 RPP Report from the end of August, we discussed how the weakest areas were registering failed breakdowns and digging in at support.

As the third quarter winds to a close, the bulls just took the lead for the first time since early in the 1st half.

Everything is clicking for them and they're in control of the game right now. While it's been a nice comeback, it's still just 52 to 48, so they have plenty of work to do.

I'm not talking about basketball. Not the Chicago bulls. I'm referring to stock market bulls and the current score on our risk checklist.

It's currently at its highest reading since we started publishing it back in June, so we'd be remiss not to write about it.

It's been a great roadmap for us in recent months so let's have a quick look at what it's saying now as well as some of the more recent developments that have taken place.

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

Mixed signals have been the rule rather than the exception since the market peaked in early February.

The major stock indexes have continued to print record highs while breadth has deteriorated beneath the surface, creating several bearish divergences. 

Some stocks have gone up and some stocks have gone down. But the reality is that most stocks have gone nowhere.

The same is true for commodities.

We’ve noticed pockets of strength in base metals, livestock, and softs. But the majority of commodities have remained range-bound since the beginning of May.

From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts

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 discussed all the whipsaws we had been witnessing in recent weeks and noted that the next major piece of information would be the velocity of the reactions these charts made in the opposite direction.

On this episode of the podcast, I sit down with Ed Clissold, Chief U.S. Strategist at Ned Davis Research.

I've been a big fan of Ed's work for a long time, not to mention Ned Davis is one of my personal heroes.

The work they do over there has been inspiring to me throughout my entire career. So as you can imagine, it was so fun and such a pleasure to chat with Ed.

We talk about Market Breadth, Sector Trends, Momentum and Seasonality.

If you have any exposure whatsoever in the market, or even thinking about putting on exposure, then this is the episode for you!

Enjoy!

When Consumer Staples are underperforming, what type of environment are normally in?

Staples are making new multi-decade lows relative to the S&P500 and flirting with a catastrophic breakdown relative to Consumer Discretionary stocks:

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

As the rally in US Treasuries fizzles, we have to ask ourselves...

Where’s the alpha in the credit market?

It’s an important question, especially for those of us who maintain exposure to bonds. 

And for those of us who don’t, it’s always good to know what’s going on in the fixed income space, as it’s often very valuable information.

Frankly, as investors, it’s irresponsible and negligent to not know what’s going on in this asset class.

It’s the largest market in the world!

And right now we’re seeing evidence of a shift in leadership toward High Yield Bonds $HYG.

We know it’s in our best interest to pay attention to this development so let’s look at a couple charts that suggest bond investors are reaching further out on the risk curve for a higher yield.

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.

We analyze a lot of data here at Allstarcharts.

Stocks in the U.S. and around the world, Interest Rates both domestic and global, Commodities, Currencies and an infinite amount of Intermarket Relationships that help us identify trends across assets.

Price is what pays. Not just around here, but also for you reading this, as well as every other investor on the planet.

Nothing else is going to pay you.

So when it comes to "What is the best Technical Indicator?"

The answer is Price.

Now, in order to supplement our price analysis, we include things like Momentum and Breadth studies, Relative Strength, Sentiment, Seasonality, Volatility and a bunch of new tools and strategies that we continue to develop as markets evolve over time.

Sentiment can be a tricky one.

I think anyone who has been in markets for a while would agree.

The short answer is that there is NO single sentiment indicator that will tell you when to buy or sell stocks, or any other asset class for that matter.

Where Sentiment really stands out to me is when it is at a historic extreme, which by definition, is not very often.

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

In today's post, we’ll discuss some of our favorite and most important intermarket ratios and see what they’re suggesting for markets and risk appetite around the globe.

One thing we found interesting when digging through these charts is that many of them look a lot like stocks do right now. 

Sideways. Range-bound. Messy. But, within the context of underlying uptrends.

So these are basically just continuation patterns on shorter timeframes.

But, after consolidating for months and even quarters now, we are beginning to see some resolve higher… kind of like we’re seeing from stocks on an absolute basis.

Coincidence? Probably not.

We think this makes a lot of sense and bodes well for risk assets. Let’s take a look at some of these charts now.

Here’s one of the most important cross-asset ratios we track, and it’s a great example of exactly what we’re talking about. 

This is the stocks-versus-bonds ratio $SPY/$TLT: