Surprised to see reits continue their underperformance against the S&P, I understand how most market participants view reits as a long term rate play (yields down reits up etc) however I think the market is not taking into account that reits should perform "relatively" well in a stagflationary environment. In other words reits might get a stagflationary bid.
Gold continues its multi week breakout against SPY and seems it will continue so until it hits the resistance trend (possible breaking out further if markets do enter a bear market although I am in the camp of 5,400 being the near term bottom for SPX
Chart doesnt look great for small caps. The S&P likely will continue its outpermance against the russell 2000. Although small caps trade at a discount, the quality of companies in the russell is much lower compared to the S&P. A discount is likely more than warranted
The S&P may be on to a trend of underperforming the equal weight S&P right until it hits the support. An outperformance of RSP likely means a tilt towards value and an underperformance of the MAG 7.
We shall see what happens, I think the Mag 7 can out perform in the short term given the pace of multiple contraction ~37x earnings to ~25x earnings.
The FTSE MIB has been performing well as a result of the increasing expectation of european fiscal expansionary policy as well as localized defense spending (expected economic multiplier effect) Italy has national defense players however Italy has historically been importing the vast majority of its defense needs from the US. Expectations are that this policy will...
Bitcoin is trading on the trend line against spot gold and it looks like we may breakdown and test the lower support, meaning we see short term gold outperformance against bitcoin. I do think we will hold the lower support and bounce back stronger.
I did previously mention that bitcoin may test 81K then continue trading in the parallel channel with a cycle high...
Seems to be that the equal weight S&P is going to breakout against the S&P. An outperformance of rsp is essentially a value vs growth trade. We will see in the coming weeks how this plays out
Commodities are left for dead even though they outperformed during 2021. This is a chart to watch for the long term imo. We could get a break out sometime in 2027
I do think the best way to play the US underperformance story is through Japanese equities. Europe has moved too fast in a short time frame, China seems to me like a short term story whereas Japan seems to be the best way to play it.
Corporate earnings growth has been present in Japan post GFC unlike China and Europe to a lower extent.
Japanese valuations are...
In addition to previous post on spy/efa we can see the spy/urth actually testing the historic support and breaking down. The valuation differential + The destruction of US competitiveness as a result of tariffs would be tailwinds for the continued outperformance of row equities over the US
Rest of world equities (in particular europe) had been underperforming the US for essentially the post GFC era. It seems we are close to getting a test of the support for this decade+ trend. If we get a clear breakdown it might mean its time to bet on equities outside the US.
A few months ago we have gotten a gold breakout against the S&P which seems to me to be...
This is going to be a multi year gold outperformance over s&p. S&P staring valuations are high and global geopolitics favoring gold reserves over usd reserves will likely help. Think of all the non western government that had billions/trillions parked in usd slowly change a portion of that into gold
Looks to be that bitcoin is continuing to trade in the channel. Likely we would see a bounce to 90k to support the trading the channel. Seems to me that bitcoin could trade at 170k then take a u-turn to 70K
Looks to be time for a clear bounce in the materials sector. Seems to be a lagging sector the past few years being range bound. I do think we get a test of the channel resistance.
XLP traded positively against XLY and reached the trendline from the carry trade unwind. Looks to be time for the market to go back to risk on for a while and therefore a short term bottom for S&P
