Deep Trouble, (but) Deep Value: despite [or perhaps because of!] all the bad news, challenges, threats -- a big shift has happened in European equities... (1/x)The combined PE ratio (average of the forward PE, trailing PE, and PE10 ratios) has dropped to extreme cheap levels. It is more or less on par with levels seen:-at the bottom of the dot-com bubble burst bear-and the 2020 pandemic panicThat said, it has yet to plumb the absolute lows seen during the global financial crisis and subsequent European sovereign debt "echo-crisis"Two cautionaries: 1. Although cheap, it could get cheaper.2. The “E” side of of the PE ratio is a moving targete.g. if earnings were to fall fast it could make valuations seem a little bit less cheap than what they appear now...But practically speaking, rather tha
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Weekly S&P500 ChartStorm - Bull market correction
Learnings and conclusions from this week’s charts: $S&P 500(.SPX)$ The August price action looks like a bull market correction.However the correction drivers look to be turning down again and the market rebound has stalled at short-term overhead resistance.Seasonal downdrafts are most intense typically in late-Sep/early-Oct.Retail flows, hedge fund positioning, corporate buybacks, analyst earnings estimates are all displaying clear bullish/extreme optimism.Meanwhile the macro remains murky (e.g. from charts this week show JOLTS jobs jitters, student loan payments unpausing).Overall, there’s definitely a case to be made that the August sell-off was a sort of healthy correction, but at the same time, it might be a little healthier if it cleared
Weekly S&P500 ChartStorm - Bull market correction
Weekly S&P500 ChartStorm - Sentiment is increasingly consensus bullish
Learnings and conclusions from this week’s charts: $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ(.IXIC)$ $Invesco QQQ Trust-ETF(QQQ)$ $Nasdaq100 Bull 3X ETF(TQQQ)$ $Nasdaq100 Bear 3X ETF(SQQQ)$ $NASDAQ 100(NDX)$ $DJIA(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$ Sentiment is increasingly consensus bullish.Bears have all but gone extinct.Large and small investors alike are basically all-in.Tec
Weekly S&P500 ChartStorm - Sentiment is increasingly consensus bullish
Weekly S&P500 ChartStorm - The market is heading into a seasonal sour patch
Learnings and conclusions from this week’s charts: $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ The market is heading into a seasonal sour patch.Bullish sentiment is at a 20-year high.A couple of macro/technical warning signs are lighting up.US tech stocks trade at a 2-3x premium vs global.Alternative asset returns can be quite misleading vs public markets.Overall, momentum remains up and to the right — albeit with an increasing number of amber lights and red flags. With folk crowded to the bull side and valuations priced for perfection, anything less could see a changing of many minds1. Seasonal SnipBeen a good run YTD for stocks so far, but beware the second half of February — the market has his
Weekly S&P500 ChartStorm - The market is heading into a seasonal sour patch
European equities are showing up as cheap
European equities are showing up as cheap
Weekly S&P500 ChartStorm - The S&P 500 finally crossed above the 5000 level
Learnings and conclusions from this week’s charts:The S&P 500 $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ finally crossed above the 5000 level.A number of short-term risk indicators are lighting up (sentiment, breadth, financial conditions).Valuations are also getting elevated as confidence surges.Credit spreads and the VIX $Cboe Volatility Index(VIX)$ meanwhile are complacent, calm.In the long-run, stock prices go up (albeit the long-term is simply a collection of many short-terms).Overall, there are ample bullish signs, signals, and stories. And indeed, in the long-run, historically at least, stocks go up. In the current short-run, there are some fa
Weekly S&P500 ChartStorm - The S&P 500 finally crossed above the 5000 level
Weekly S&P500 ChartStorm - 2 July 2023
Learnings and conclusions from this week’s charts:The S&P500 $S&P 500(.SPX)$ closed up +6.5% in June, its 4th consecutive monthly gain.YTD it close up +15.9%, and historically strength in H1 tends to echo into H2 (albeit with some notable exceptions).Although the Nasdaq far outperformed the S&P500 this year, it has been driven entirely by AI hype (with various macro-fundamental warning signs showing).Record high household allocations to equities (in 2021) warns of a potential “lost decade“ (big trading range) for the stock market.Both big and small investors alike are changing their mind on markets.Overall, technically the market looks solid. If you knew nothing about neither AI hype nor murky macro narratives, you’d probably be going
Weekly S&P500 ChartStorm - 2 July 2023
Weekly Macro Themes - Remain bullish small caps
This week I covered the following topics/ideas:1. Precious Metals: The gold bull market continues onwards and upwards, with silver also looking stronger, gold miners ticking along, and oil reaching an extreme low vs gold. 2. Defensive Value: Bullish on defensive stocks relative to $S&P 500(.SPX)$ as a bullish technical inflection point takes place against a backdrop of extreme cheap relative value, record low positioning/cap weight.3. Small Caps: Remain bullish small caps $iShares Russell 2000 ETF(IWM)$ given cheap absolute and relative valuations, potential upside from rotation out of tech and prospective monetary/macro tailwinds.4. Upside Downside: Reviewing the various upside vs downside risks helps
Stock & Bond Bears: 10 Charts to understand S&P500 Weekly performance
This week a look at some timeless charts from the past couple of years Welcome to the Weekly S&P500$S&P 500(.SPX)$ #ChartStorm— a selection of 10 charts which I hand pick from around the web and post on Twitter$Twitter(TWTR)$ .This week it’s a slightly different focus than usual given the quieter time-of-year — looking at some of the more timeless and thought provoking charts of the weekly ChartStorms of the past year or so.1. Lost DecadesPlenty of folk out there telling you to buy and hold and dollar cost average and focus on the long-term. Which is all well and good, but just be mindful that lost decades are actually relatively common... (especially if you expand the sample to oth
Stock & Bond Bears: 10 Charts to understand S&P500 Weekly performance
Weekly S&P500 ChartStorm - The US overwhelmingly dominates in global equities
Learnings and conclusions from this week’s charts: $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2503(ESmain)$ Sentiment is shifting; from euphoria to doubt.Valuations are at the upper end of a new higher range.Passive/index funds dominate vs active funds.The US overwhelmingly dominates in global equities.The bar is high for US vs low for global equities (opportunity).Overall, the evidence continues to show a shift in sentiment from previous extreme bullishness and frenzied flows to now increasing skepticism and concern as Trumphoria subsides and a new challenging reality sets in…1. Waning Euphoria: The mood on the mark
Weekly S&P500 ChartStorm - The US overwhelmingly dominates in global equities
10 of the most notable and enduring charts from the past year
This week it’s a slightly different focus than usual given the quieter time-of-year — this edition takes a look at some of the most notable and enduring charts from the past year1. Market Cap to GDP Ratio: This one made the list because the trend (and cycle around the trend) is very interesting — but perhaps more poignant is the fact that for the first time in history the US Stockmarket capitalization to GDP ratio broke through the 200% mark. A reflection of the time we live in with regards to US leadership in global markets, but also the stage we are at in the market cycle.2. US Market Cap vs the World: Another market-cap milestone was set this year — the US stock market cap weighting in developed market equities reached a new high. Again this is interesting because of how it
10 of the most notable and enduring charts from the past year
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