From the desk of Steve Strazza @Sstrazza

When running through some scans this morning, we came across a stock that's been on our radar from the Under the Hood universe.

You can read our most recent report here. It was just published Monday.

This is a quick follow-up to discuss a hot stock from a leading industry group... And of course, it's presently offering us a skewed risk/reward. At the end of the day, that's all we're really looking for!

On the surface, this company is just an old LED light and radio-frequency device maker...

But, that's not the whole story.

They actually manufacture and sell some of the most important inputs and materials for a variety of burgeoning growth industries.

While a seemingly favorable fundamental story is always nice to have as a potential catalyst, it is never enough. For us, it's all about price.

Speaking of which, let's dive in and see what the charts are telling us.

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

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 of 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 Grant Hawkridge @granthawkridge

As markets remain mixed we continue to see lackluster action from some US indexes even as some others make new highs.

Large-Caps recently charged back to fresh all-time highs, but the Small- and Mid-caps are still facing some serious overhead supply.

As always, we’re snooping around our market internals chartbook to see what’s really happening underneath the surface in these areas, and whether internals agree with the price action in these smaller market-cap indexes. And even more importantly, if they support, or disagree with the new highs in Large-Caps.

We'll also answer the question: "Just how bad is the recent deterioration in breadth in some of the weaker indexes?"

We have been getting fewer new highs for a while now, but after such extreme initiation thrusts this isn’t too unordinary, and nothing to cause huge concern.

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

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 of 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 Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

We’ve pounded the table about historic breadth thrusts since we first saw these readings start to pop up in early June of last year.

It's now a year later, and we're still seeing them... In fact, the S&P 500 recently registered its highest percentage of new 52-week highs in history - absolutely crushing the historic reading we saw in Q4 of last year.

So, why is this important?

These extreme readings are as bullish as it gets and are a very common characteristic of the early innings of a fresh bull market. It's as simple as that, right?

Well, yes... But, not exactly...

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

Thanks to everyone who participated in last week's mystery chart.

We asked whether this chart had the momentum to finally reverse course and break loose from the grips of its primary downtrend.

The responses were mixed, with many wanting to wait for more information... In many cases, looking for confirmation of the impending breakout.

Well, not much has changed as the chart has yet to make a decisive move from this key level.

The chart was a weekly candlestick view of the MSCI Frontier Markets ETF $FM.

Let's dive in and see how we want to play this index comprised of stocks from some of the least developed countries around the world.

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

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 of 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 Grant Hawkridge @Granthawkridge

We’ve been vocal about the strong market internals supporting equities for some time.

We’ve seen one extreme breadth reading after the next from just about all of the major indexes and sectors since last summer.

One index that hasn’t shown a bullish initiation thrust like its peers is the Nasdaq.

We recently pointed out the NASDAQ Composite showing a substantial deterioration in 52-week highs the past few weeks...

But there are still areas of the market with strong & expanding internals. Breadth data continues to be mixed just like we’re seeing from many asset classes right now.

Using equities as an example, while growth has been weak, value and cyclical areas remain strong.

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

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 of 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 it 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?

It sure feels like a long time ago now, but it's been less than a decade since the European Union underwent a rather serious sovereign debt crisis.

This set off a roughly two year bear market for International Stocks as well as a rangebound mess for US stocks.

After this bout of volatility, most risk-assets carved out significant lows in 2016 and rallied higher until global risk peaked in 2018. Then it all fell apart again last year.

This brings us to today, where we're now seeing European countries and indexes trade right back up to their 2018 or pre-COVID highs left and right.

While diversified global indexes like MSCI EAFE $EFA and MSCI Europe $VGK recently reclaimed their former highs from 2014, 2018, and are already well above their pre-COVID peaks - they are now approaching a far more important area of overhead resistance at their pre-financial crisis highs.

From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @GrantHawkridge

The credit market is overflowing with information. 

We haven’t discussed it too much lately… but that doesn’t mean we aren’t paying close attention.

It would be foolish to overlook it. After all, they call Bond traders the “smart money” for a reason... Right?

We’ve recently discussed the theme and likely implications of how so many major stock market indexes - in both the US and abroad, are hitting very logical levels of overhead supply right now.

We think it’s no coincidence that all of this is occurring at the same time. And you’ll never guess what else…

We’re also seeing this very same behavior from some of the most important Bond Market ratios we track, as many are currently running into crucial inflection points.

From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @GrantHawkridge

Following an onslaught of bullish initiation readings for US stocks last year, global equity markets began to register similar breadth thrusts earlier this year.

In this post, we'll take a look at those thrusts in addition to the current state of international stock market internals.

We'll even take a quick look at some of the differences we're seeing take place beneath the surface in various global markets.

Let's dive into it.