Case for Airlines Out-Performing Continues to Build
All the way back on May 30 we highlighted the emerging case for Airlines sustainably out-performing the SPX. We didn’t take a strong, high conviction stance on this belief, but merely stated the “possibility” for this happening was becoming stronger. At…
Gold Miners Breaking Out
The chart below highlights the AMEX Gold Bugs Index. This index is now following the previous break-out in gold as it pushes above trend-line resistance dating back to its 2011 highs. For more detail on the potential upside in gold…
Can Gold Now Target $3,000 With Miners Out-Performing on the Ride Up?
Back in the saddle, finally. I apologize for being away so long. Regardless, prior to stepping away, I had begun to shift our focus toward metals and away from equities with the thought being that the best trading opportunities were…...
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…...
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…...
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…...
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?)
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?
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…