What Happened Last Week?
A brief note on what I saw from last weeks price action.
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Welcome to the ‘What happened last week?’ blog post. In this post, I will share key technical data tables for various asset classes and categories. Each table will be accompanied by a key chart and some short commentary.
Current Environment
The Bottom Line: The Bull Market Behavior Checklist provides definitive evidence for a consistent and unwavering bullish market trend, which has persisted for the past 49 trading sessions.
Current Breadth
The Bottom Line: The stock market has recently shown some signs of weakness. However, despite this, the majority of companies (over 75%) listed on the S&P 500 index are still trading above their 40-week moving average. This indicates that the market breadth is positive.
The bearish narrative that has been circulating has been consistently proven wrong.
Furthermore, it's worth noting that the number of new highs in the market has exceeded the number of new lows, which is another positive sign.
Current Market Sentiment
The Bottom Line: The short-term sentiment backdrop, with the VIX and the put/call ratios is beginning to move higher, which could suggest some caution here.
However, there is room for a further expansion in optimism before it becomes an excessive headwind.
Asset Class
What Stood Out: Given that gold has broken out of a 40-month consolidation base and is currently moving higher in a continuation of a primary uptrend, could we see the Gold ETF reach $250 using the measured move formula?
Global
What Stood Out: France recently reached its all-time high, but soon after it retreated back to its breakout level. This situation has caused some uncertainty as to whether EWQ will be a constructive retest or if it will be considered a failed breakout move. Currently, EWQ price is still above the breakout level, the decision is in the hands of the bulls.
S&P Sectors
What Stood Out: The tailwind for the energy sector right now is strong, with a massive decade-long base breakout on our hands.
Breadth is solid…
Momentum is strong…
Relative Strength and Price Trends are pointing higher.
S&P Industries
What Stood Out: Homebuilders are a highly dependable indicator of the broader market and economy. Given the breakout from a two-year base, the industry has been blazing ahead towards the 161.8% extension. The crucial question now is whether it will fail to breakout or will it take a brief pause before continuing to soar.
Factor Style
What Stood Out: Without a surge in momentum, the S&P 500 Growth index will face significant challenges in breaking out to fresh highs.
Fixed Income
What Stood Out: The high-yield corporate bonds have been showing a pattern of transitioning from a bearish trend to a bullish trend. However, this reversal pattern seems to have been stuck in a sideways consolidation phase for the last three months. It is uncertain whether the bullish trend is gaining strength and will move higher or if there is more weakness ahead for bonds across the board.
Currencies
What Stood Out: The recent dollar strength can definitely NOT be seen in the USD/MXN, with this currency pair hitting an 8-year low. So, Is the Peso pushing the USD onto the ropes before other currencies bounce back?
If the US Dollar Index rolls over, the dollar is most likely to fall hard against the peso, and we might see a retest of 2012 highs.
Commodities
What Stood Out: Coffee has been trading at its highest level in almost 18 months as it looks to reclaim a critical level of interest and looks to be putting the finishing touches on this bearish-to-bullish trend reversal.
Before I finish up, always remember:
Remain flexible.
We can only work with the information that is available today.
Keep an open mind.
“I can't change the direction of the wind, but I can adjust my sails to always reach my destination.” — Jimmy Dean.
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Stay safe, and good luck out there…
GH
DISCLAIMER: The information in this report is obtained from sources that Jotting on Charts believes to be reliable, but we do not guarantee its accuracy. All of the information contained herein should be independently verified and confirmed. All opinions expressed by Jotting on Charts are for informational purposes only. Jotting on Charts is not a financial advisor. This does not constitute investment advice, nor any opinions expressed, constitute a solicitation of any securities or related financial instruments' purchase or sale. Jotting on Charts is not responsible for any losses incurred from any use of this information. Do not trade with money you cannot afford to lose. It is recommended that you consult a qualified financial advisor before making any investment decisions.