The Case for Euro Financials Out-Performing the Broader Market Remains Compelling
Here is some background on how we’ve approached this subject in the past here and here. In a nutshell, we’ve been favorably disposed to Euro financials since May and have believed they could out-perform both the broader market and their…...
Long CREE / Short PANL Spread Trade Up 12% Since September 27th Post
Wanted to update this idea/thesis given the nice pop in CREE today. On September 27th we had a post that noted a spread trade opportunity had emerged in the flat panel/LCD space. That post can be found here and the chart…...
Relative Strength of DJ Investment Services Index at a 20 Year Low
I believe we discussed informally (phone, email, etc.) the possibility that investment services / asset manager-type companies could outperform over the coming months. This thesis and discussion revolved around the following: 1) Potential for a material rally in equities, based…...
Additional Thoughts on Commercial Trucks
Long story short… NAV, SRI and the ratio of NAV vs. CMI all likely have more downside ranging from 5%-25%. NAV likely has 15%-25% more downside. SRI likely has 5% more downside. The ratio of NAV vs. CMI likely has…...
Semis Likely Have More Relative & Absolute Downside Remaining
The chart below plots the ratio of the SOX vs. SPX. Note the ratio doesn’t reach intermediate-term support region (A) until ~3% lower. More material support doesn’t come into play until line (1), some ~15% lower. Additionally, the 52 week…...
Revisiting Our Cycle Work Dating Back to 1896 for Perspective on the Rally off the March 2009 Lows
For some background on this topic check out this post here. A couple of months have passed since that original post so we thought it worthwhile to update the analog charts to see what has or hasn’t changed in terms of…...
As a Group, Coal Appears to be Breaking Out & Could Continue to Out-Perform
For some background on our thoughts on coal, please see these previous posts here and here. Since our original post on the group all the way back on August 9th, the DJ Coal Index has risen 22% vs. only a…
Defining Alpha, FXI Has Out-Performed the SPX by 700+ bps Since We Suggested as Much a Month Ago
On September 7th we had a post detailing our thoughts on FXI and our belief that domestically listed Chinese equities were about to begin a period of out-performance vs. the SPX. In that post we specifically noted the following: “A long…...
Where are the Most Appropriate Places to be Levered & Long in Anticipation of a Cycle Bottom?
What I’ve attempted to do here is put together the easiest, yet most robust macro tool that I could fathom, that each of you can use in the future if for some reason(s) our working relationship end. In its simplest…...
Updated Analog Chart of YTD Rallies in a 4th Consecutive Up Year
Are we going to get our 1,540-1590 SPX target by YE? Charts below are updated with price action as of 10:30 AM EST and assumes DJIA 13,660. Remember, these analog charts are of the DJIA and we’re extrapolating the conclusions…...