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…
On a Relative Basis, Gold Miners Face Resistance
The chart below plots the ratio of Arca Gold Miners Index vs. the SPX. From 2001 to August 2011, the ratio rose to 1.60 from ~0.15. This means gold miners as a group out-performed the SPX by a factor of…
Regional Banks May be Set to Under-Perform Larger Ones
The chart below plots the ratio of the KBW Regional Bank Index vs. the XLF. As it rises, regional banks out-perform; as it falls the XLF out-performs. The ratio is breaking below trend-line support and a multi-year consolidation pattern. That…
Continue to Reiterate that Homebuilders Likely Have More Upside & Out-Performance Left
The chart below plots the post peak price bubble analog we’ve highlighted numerous times before with prices updated through today. The black line is the S&P Homebuilders Index. Our ongoing thesis has been that it will ultimately reach ~50% of…...
PC Players Could Have Significantly More Downside
We recently had a post on INTC and noted it sat at quarter-century support. We also noted that relative to the XLK tech ETF, it was as cheap as it’s ever been. In that post we asked the following if…
Oil’s Decline Helping our Airline Out-Performance Thesis
We’ve re-visited the case for airlines out-performing two times on this site. Our last post on 9/7 was the catalyst for initiating a long spread trade in the group with a corresponding short in the SPX. On 9/14, we then…...
Defense Industry Ready to Out-Perform?
The chart below plots the ratio of the DJ Defense Index vs. the SPX. From its 2009 highs to its recent lows the ratio declined by ~40% as defense companies have under-performed the broader market materially. The decline in the…
When and Where Will Transports Likely Begin to Out-perform the Broader Market?
We’ve discussed the idea of avoiding the transports in the recent past. We’ve also noted how their recent under-performance (~-1,000 bps vs. SPX over past year) is not necessarily a warning sign for the broader market. With these ideas in…...
Biotechs Should Continue to Out-Perform Materially
On July 16th we noted pharma and biotechs were working on noteworthy, long-term technical break-outs. Regarding those groups, we said the following in that prior post: “The set-up in bio-tech is the most compelling given that the DJ Bio-tech index has already…
These Apparel Retailers Face the Stiffest Long-Term Resistance
The chart package below includes a bunch of apparel retailers that face some decent resistance. If you’re looking for under-performers we’d prefer the names with the longest-term resistance at hand (i.e., FL faces all-time highs dating back to 1987) and/or…...