Month: April 2021

ClearWater Market Commentary as of April 26th, 2021

Stock markets came under pressure from renewed worries that rising global COVID-19 cases will delay the full recovery of economic activity.

Interesting Mix – April 23rd, 2021

The S&P 500 closed near a new high again. The market pushed down Monday, Tuesday and Thursday but could not build any downside momentum. The resilience is impressive. The Nasdaq is building out a consolidation zone after the run up off the March lows. All of the indexes are poised to break out higher, and the breadth suggests that is probably what comes next.

Globally, the markets were down around 1%, which is not exactly plummeting. It looks more like a consolidation within an uptrend and the SSIH suggests that in the US markets as well. Commodities had an up week, as industrial metals commodity related trades were up nicely. The charts related to electric vehicles were setting up and some of the strongest charts in the list were the industrial metal miners. Corn, Soybean and Wheat had big moves higher too.

This week saw more stocks up big than down big, which is interesting with the indexes finishing slightly lower. I am expecting a turn towards the materials, industrials, energy and technology sectors.

While bitcoin finished the week around $50,000, it traded as low as $47,500. Once again, the wide range in Bitcoin is a lot more difficult to buy and hold with a 27% pullback off the highs in a little more than a week.

Summary: A major trend line is breaking in commodities. I want to be part of that trade as it breaks out. The clean tech space is a massive user of commodities, so my favorite way to play a lot of these ideas is through the commodity related stocks. In particular, look to the industrial metal miners. I don’t want to be a turkey waiting as the commodities move higher, so I am setting up in the clean tech related trades expecting to climb higher.

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ClearWater Market Commentary as of April 19th, 2021

The week kicked off the unofficial start of earnings season with 22 of the S&P 500 companies scheduled to report first-quarter results.

Keep Your Guard Up – April 16th, 2021

The S&P 500 closed on a new high again. The defensive leadership really surged on Thursday and Friday, as we moved through Options Expiration. This is starting to be a meaningful trend that worries me.

Commodities had a huge up week, but commodity related trades were a mixed bag. Oil names were poor considering oil was up big. Gold, Silver and industrial metals like Copper had a good week and the miners did too. There are some charts below detailing the difficulty with the US Dollar trade coming up and it is important to check the US dollar as the week progresses.

Last week I was wondering about the weakness in commodities and that was certainly answered this week. Boom Baby!

Once again, the stocks declining big outpaced the stocks up big. 460 stocks were up big and more than 600 were down big. That happened last week too but it was almost even last week with a little more to the downside. It’s getting worse is what I am saying.

Bond yields continue to moderate, helping the gold trade as well.

The currencies are tightly wound as the US Dollar has pulled back for two weeks. We are about to see if that is going to continue or if we will get a surprise reversal that sends commodities lower. Bitcoin broke its major uptrend line this week.

The Bullish percent indexes and other indicators are at or near all-time highs for breadth. On the video I did a look back to see how bullish that is. It actually is a little cautionary. I would encourage you to follow it along as I review 5 past peaks.

Summary: All the indexes made higher highs this week. The leadership by the defensive areas of the market is starting to make me pause. Financials were oddly below average this week, even though banks reported stellar numbers. Oil rallied but energy stocks didn’t. I want to stay cautious on adding to energy until that improves. These weak cyclical signals are concerning to me. Stay bullish with tighter stops.

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ClearWater Market Commentary as of April 12th, 2021

Trading got off to a strong start thanks to the previous week’s monthly payrolls data, which was released when the market was closed for the Good Friday holiday. The Labor Department reported that employers added 916,000 jobs in March, well above consensus estimates of around 650,000, and the most since last August.

Big Green Highs – April 09, 2021

The S&P 500 closed on a new high again. Almost all the sectors had a good week with most making fresh highs. I really like the mega-cap tech names here. They are running higher. The market of stocks looks set to continue the uptrend.

As I mentioned, almost all the US sectors are hitting new highs, but Europe is also hitting new highs. Australia finally got out of bed and joined the party this week. Asia was down slightly (less than a percent) for the most part.
Remarkably the currencies had the USD moving lower, but commodities did not rally significantly. Commodity related stocks were down or marginally up. EEM – emerging markets – did break down below the trend line and close there. CEW – emerging market currencies – dropped and closed near the lows. This is typically directionally related to commodities. Why the weakness in commodities? I don’t have a good answer, but they might just need time to relax after a stellar 6 months.

It’s all makes for a pretty bullish view. It does feel a little exuberant but when indexes are tagging new highs worldwide, it is bullish. As we get very bullish, I usually get cautionary, but few charts are yelling caution. One example would be more stocks declining big (greater than 5%) than rising (greater than 5%). Considering how big the indexes were up, with the strength of the mega-cap names, it was odd to see big decliners slightly outpace big gainers. Is that being too fussy?

I would suggest it’s open water ahead until something changes.

Summary: The $SPX has made three higher weekly closes in a row. All the sectors are participating with the exception of energy so far. With tech, communications services, and consumer discretionary leading the party, I have trouble arguing. The rally is under way. I won’t let a weak Monday or Tuesday wear me out. I plan to use a weak day to find more trades until proven wrong.

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ClearWater Market Commentary as of April 5th, 2021

The S&P 500 and Dow Jones Industrial Average climbed to record highs after US President Joe Biden unveiled a $2.25 trillion infrastructure investment plan, and the US vaccine rollout continued to surpass targets.

Tech Gets a Bid – April 3, 2021

S&P 500 closed on a new high again. The market meandered sideways for three of the four days but closed decisively up on Friday. The NASDAQ led indexes higher, which is bullish for a rotation back into tech. All the sectors had a good week. I really like the mega-cap tech names here. They look ready for their next leg higher.

While the indexes didn’t correct significantly over the last 6 weeks, the large growth areas and speculative names (SPAC’s), GME, AMC, and software names all got taken to the woodshed for a 50% trim. The SSIH has been highlighting the underlying weakness, and hopefully you avoided some of the chop. Broadly, the market of stocks looks set to resume the uptrend.

The vaccination data for the USA continues to get more promising. America expects to have 200 million people vaccinated within the first hundred days of the new president. This is very solid, considering Canada ranks 64th in rollouts, mostly due to a shortage of vaccines. This dominance in rollouts by the USA suggests more money rotating into US assets at least until the rest of the globe gets vaccines to distribute. The AstraZeneca vaccine has been problematic, while most of the US inventory is Pfizer, Moderna and JNJ.

Almost all the US sectors are breaking to one-month highs, or breaking downtrends, or making all-time highs. That looks like a solid way to start a larger rally. The transports and industrial’s look bullish. That should be enough to say just get long. Globally we saw a worldwide rally. That’s hard to argue with when all the screens turn green. I am watching to see if the crude oil chart can continue to rally. With jet fuel starting to be consumed, and cars selling like toothbrushes, there should be demand growth. The gold miners look like a theme to be in. Large cap tech, growth names with earnings, and semiconductors look well suited to investment here.

Summary: The $SPX has made two higher weekly closes in a row. All the sectors are looking to participate. With tech, communications services, and consumer discretionary joining the party, who needs a clock saying it’s time to go home? The party is just getting started it would seem. Let’s hit the charts.

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