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jay_S_ Updated 

One sign that the market may be turning skeptical on the battle against inflation is found within this chart. This chart plots the RELATIVE performance of TIPS against US Treasuries (as measured by NASDAQ:IEF ). While bond funds in general have been under pressure against stubbornly higher rates, it is the relationship here that catches the eye. Breaking out...

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A stronger US Dollar TVC:DXY is not typically associated with a strong bull move. However, AMEX:SPY has been consistently rising thus far in 2024 while TVC:DXY has remained in a channel. Recent upward movement in TVC:DXY may be worth watching as a sign that bullish behavior could be approaching a reversal point.

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An inversion between the 2yr UST yield and the Federal Funds effective rate normally does not exceed -1%. When that happens, it's an indication the bond market is not getting the reaction from the Fed that it "expects" (or maybe it is a "want"). Inversions of this degree have normally been unkind to the equity market, but that is clearly not the case here in...

jay_S_ Updated 

The high yield (junk bond) spread against Treasuries, having earlier moved above the important 4% threshold, continues to advance higher. It has now eclipsed 5%. Accompanying this indicator is the $SPY decline which has caused these "jaws" to move closer to closure. Maintain risk management and stay aware for signs of reversal.

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This measure of Liquidity (blue line) generally tracks AMEX:SPY (orange line). Both were generally declining throughout 2022 and then increasing in 1H 2023. However, in the last month or so there has been a marked divergence, the resolution of which may be an important aspect of equity market direction. One to watch.

jay_S_

Investors may benefit from keeping an eye on this relationship of IWM to Gold. Small caps, represented by the the Russell 2000 index ( AMEX:IWM ), are generally well-regarded and in favor when growth prospects are good; gold on the other hand is typically considered a defensive store of value. I consider that early 2018 period, when things were generally...

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Many believe the Fed kept the Federal Funds Rate (FFR, in orange) too low for too long. But the recent path of hiking has caused the FFR to now get above the 2 year UST yield (in blue) -- a situation that rarely happens, and rarely is a "good" sign for markets. Stay alert.

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US S&P 500 stocks ($SPY) have been in a continued uptrend when plotted against equities of Developed Markets ex-US ($VEA). Of late, that trend has really reversed and $SPY is breaking key levels, to possibly be challenging that LT uptrend channel.

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We all hear a lot of market talk, but the simple fact of the matter is that energy ($XLE) has been steadily outperfoming $SPY here on a relative basis for some time. Many equity indices are constructed with little or no Energy, and that under weight has been a detriment in this environment.

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The EW Consumer Discretionary to Consumer Staples ratio can provide insight into the specific stocks that are driving equity outperformance. Typically, in "risk on" regimes the Discretionary sector will outperform the Staples sector. Conversely, when investors get "defensive" Staples will tend to attract a greater share. Here, we see that this Relative...

jay_S_ Updated 

Generally speaking, it is never a good sign when 50% or more of the S&P 500 stocks are trading below their 200 day moving average (DMA). The % over 200dma graphed here is displaying a negative slope, and this is not indicative of a bull market. March may have yielded a $SPY relief rally that initially looked good, but has now run its course after retracing...

jay_S_ Updated 

Thus far in 2022, the overall S&P 500 index has struggled. In weighing the collective evidence of stock market health, we may seek breadth measures or tools to see how the component stocks to this index are individually performing as well. Here, the percentage of $SPY stocks trading above their 50 day moving average (plotted weekly) is shown to fluctuate widely....

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The use of Equal Weight ETFs such as Consumer Discretionary (RCD) relative to Consumer Staples (RHS) can yield meaningful clues about the underpinnings of the stock market. Presently, this RCD/RHS relative strength ratio is below the levels seen in the Q4 2018 corrective period (red line in graph). This measure, along with other signals such as an elevated VIX,...

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This week, we will zoom out to take a monthly look at what "hard assets" are doing in the market. Post-GFC, the SP500 index ($SPY) has demonstrated incredible relative strength when plotted against the CRB commodity index. That long run from roughly 2008 has reversed course for now, and it is interesting to see the scope or range of room to run over this...

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This weeks chart features commodities & the benefits of investment portfolio diversification. US Equities (shown here via $SPY, plotted in orange) had a tremendous run off the March 2020 Covid lows. But if you've missed it, note how the relative strength of commodities (in this case the CRB index) have outperformed SPY (relationship graphed via the blue line)...

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The CAD - USD ratio has traded within a range throughout most of 2021. Recent USD weakness, however, has shown up in trend reversals for the S&P500 index against both emerging & developed foreign market indices. Canada's stock market features many financials and resource stocks, two areas that are trending in the right direction at present. It might be worth...

jay_S_ Updated 

As interest rates rise, it would typically be a positive for $XLF. Yet here we see the Financial sector XLF trailing against SPY and reaching an important resistance point (SPY itself is also stalling against other defensives). Keep an eye on this one for clues as to market rate expectations.

jay_S_

The TIP / IEF ratio (reflecting relative strength of Treasury Inflation-Protected securities against T Bonds), having broken thru a declining long-term trend early in 2021, has now advanced to record an 8 year high. The Fed inflation narrative does not appear to be satisfying bond market participants.