Given Their Tight Correlation, Could Weakness in Lumber Prices Drag Housing Stocks Lower Too?

During the week of 8/18/12 lumber prices gapped open to start the week ~275 bps higher and at the time, were already up an astounding 38% YoY. Lumber is typically a rather subdued commodity so we thought the gap higher…...

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What does the SSEC Continue to See that Global Mining Plays Don't?

What does the SSEC Continue to See that Global Mining Plays Don’t?

We had a post the other day that suggested price action in the SSEC doesn’t carry much informational content value anymore. To some degree, YTD results justify this view with the SPX up ~12% and the SSEC down ~7%. However, what if this view…

This European Bank Could Provide Clues to the Next Big Move in Broader Risk Appetite

The chart below reflects that shares of NBG are caught in a tight consolidation pattern between lines (1) and (2). And though NBG trades in the low single digits now, we still believe its shares carry a good deal of…...

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Taking a Look at Market Leadership Groups

The chart below plots the ratio of the SPX vs. XLF. When the ratio falls, financials are out-performing the broader market. Since 2010, when the ratio has fallen to line (1) support, it has marked almost perfectly, broader market tops in…...

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Defining Alpha: Euro Financials Have Outperformed U.S. Ones by 9% Since We Suggested the Possibility on 5/31

Defining Alpha: Euro Financials Have Outperformed U.S. Ones by 9% Since We Suggested the Possibility on 5/31

All the way back on 5/31 we highlighted the potential for European financials to begin outperforming their U.S. counterparts, with this chart justifying the rational in that post. In that post we commented as follows: Ostensibly, such out-performance (of Euro…

Coal Stocks are Down 75% (the World Doesn't Need Coal Anymore?)

Coal Stocks are Down 75% (the World Doesn’t Need Coal Anymore?)

The DJ Coal Index was recently down ~75% off its proximate highs. Two similar declines have happened over the past decade in front of material rallies. Does the world no longer need coal?  Permanent structural changes because of how cheap…

Semis Have Badly Under-Performed the Broader Market for Nearly Two Years; What are the Implications?

Semis Have Badly Under-Performed the Broader Market for Nearly Two Years; What are the Implications?

The implications of the Philly SOX Index under-performing the broader market severely are similar to other recent posts we’ve made about the Russell 2000’s under-performance vs. the SPX as of late as well as how low the ratio of copper vs. gold…

Time to Pay Attention to the Swiss Franc? Sniffing out More Global CB Intervention? About to Cause a Precious Metals Rally?

First chart is the Swiss Franc alone. Note that it’s approaching long-term support line (1) in the 0.98-0.99 area.  Also note that this is 50% Fib retracement support. Also note that it is along line (1) where, for whatever reason,…...

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Repeating Pattern in the Arca Gold Miners Index at Hand

The Arca Gold Miners index appears to be completing a repeating pattern whereby the index tops out in a rounded reversal into a decent decline and then finds horizontal trend-line support. At such support the index has historically bounced materially…...

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Relative to Average Path other Assets Have Taken from Bubble Tops, Homebuilders, Despite 135% Rally, Remain Under-Valued

At the end of March 2012 I noted homebuilders appeared very under-valued vs. other bubbles at this juncture of their bubble peak price. I presented the chart below to justify this. Since that original post, the S&P Homebuilder Index has…...

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