From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return tables for a variety of different 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.

While the weight of the evidence still remains in the bullish camp, bears seem to add to their list of talking points with every passing week of late. We believe the highest probability outcome over the coming weeks to months is for risk assets to remain in a mixed and messy environment. Once we begin to see evidence that indicates the current "chop fest" is nearing an end - which could simply come in the form of a reduction in the number of...

From the desk of Willie Delwiche.

Key Takeaways:

• Active/passive debate is in need of an overhaul
• Dynamic allocation emphasizes what you own as well as when you buy it
• Shifting leadership trends could force portfolio decisions

The active-passive debate has never been really well framed. It's been oversimplified to the point of being meaningless. For example, the shift from actively-managed mutual funds to passive ETF's would seem like a victory for passive proponents. But if investors have moved from buying-and-holding those mutual funds to moving in and out of ETF's, is this really a shift from active to passive?

Seems there has been a lot of talk about the stock market "pausing" or being "due for a correction."

While I see the same things the bears are seeing, I'm also seeing price action in a variety of corners of the market still telling a bullish story. And as we like to say around here: "Only Price Pays" (h/t @alphatrends).

We're also seeing bullish options flow from several "motivated" and "aggressive" traders in a variety of names. Case in point: a software storage name in our most recent Follow the Flow report caught my attention.

The thesis has been that if Bitcoin loses 30,000, we need to be aggressively shorting these digital assets.

In that environment, not only are Cryptocurrencies themselves likely getting slammed across the board, but crypto-related stocks are also going to come under pressure.

Unlike some other crypto and blockchain funds, the Amplify Data Sharing ETF $BLOK does a great job of finding stocks with direct or indirect ties to this still-niche industry. 

This is the video recording of our June 8th, 2021, Monthly Charts Strategy Session.

Here is the video in full:

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

A couple of weeks ago, we posed this question in a post titled "Can the Dollar best the BRICS?"

Back then, we were already leaning toward "NO." Fast forward to today, and it's more like a "NO WAY."

The reason for this is simple. In that post, we explained the line in the sand for our USD/BRICS Index was ~19.

In the few weeks since, this critical level has been violated. The market has spoken, and it's saying we're in for a lower US Dollar relative to BRIC-country currencies.

For you visual learners... This is what the chart looked like back then, and here is what it looks like now. Quite the difference, right?

This is just another...

From the desk of Willie Delwiche.

Key takeaway: Excessive optimism has been slow to unwind and most of our indicators are back to signalling a high risk environment from a sentiment perspective. Individual investors last week showed the fewest bears since January 2018. While complacency abounds, investor risk appetite remains shy of where it was in March, even with the uptick in speculative activity over the last two weeks. Liquidity conditions have been tightening of late and momentum trends are diverging from price trends. While the apple cart has not been upset, the load is perched precariously and one small stumble could send fruit flying in all directions. It’s not a low-risk load on which to ride.

Sentiment Report Chart of the Week: Shifting Leadership?

The decade-long trend of US outperformance remains intact. However, more and more information points toward a possible trend reversal. The S&P 500 ETF $SPY breaks to new lows relative to Eurozone ETF $EZU.  Further weakness in...

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?

It's happening...

We're finally getting a resolution from this multi-week messy range in many Crypto assets, and it's not looking good for bulls at all.

A retest of the Crash lows of 30,000 looks incredibly likely for Bitcoin in the coming days and weeks:

From the desk of Willie Delwiche.

Key Takeaway: US stocks lack momentum while Europe gains strength. Economic recovery moving beyond the US. Bond market not confirming economic & stock market optimism.

The S&P 500 finished last week just three points shy of its highest level on record. Index-level price strength comes with momentum trends rolling over and a domestic breadth backdrop that is not providing confirmation that an upside breakout is imminent. There has been a conspicuous absence of new highs - just last week, the number of stocks making new highs on Friday was below the number making new highs on Tuesday and both of those were well below the early-May peak in new highs. We are also not seeing an expansion in new lows at this point. Rather this muddied and mixed environment is more consistent with a digestive phase than sustained deterioration.

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This week we're looking for a long setup in the FMCG sector. There are pockets of this sector that are displaying strength and we'd like to focus on one such idea this week.

We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.