Here’s how I’m currently seeing Macro & Markets: 🌎 Global ex-US Equities Still bullish on global ex-US equities, both outright and relative to the US. Valuations remain attractive, technicals are constructive, and the macro backdrop is supportive. Global equity gains have also started to broaden beyond the US, with Asia Pacific among the stronger regions recently. 🇺🇸 US Small Caps I remain bullish on US small caps. The valuation gap versus large caps and bonds remains attractive, while macro fundamentals are improving. Positioning and sentiment also remain relatively contrarian, which creates an interesting setup if the technical picture continues to improve. ⚖️ Global / Small / Value vs US / Large / Growth This is becoming one of the more interesting relative-value themes. I continue

Despite all that’s gone on this year we have actually seen quite a significant reacceleration in the global economy. Notably this has been particularly pronounced in the real-world cyclical parts of the economy (manufacturing, trade, fixed asset investment). That’s important because it’s those sectors that have the most direct impact on commodity prices. And it’s among the reasons (including geopolitics and supply constraints) we’ve seen such enduring and broad-based strength in commodities this year. It’s also been a key driver of upward pressure on inflation, and along with stronger growth has contributed to the global policy pivot to interest rate hikes that is currently underway (with the Fed likely joining the pivot party soon). This speaks to the highly cyclical nature of commodities

FOMC week is here, and the latest $S&P 500(.SPX)$ ChartStorm is flashing more warning signs than the headline index suggests. The key takeaway is simple: ⚠️ Breadth is deteriorating ⚠️ Correlations are becoming less comfortable ⚠️ Corporate bonds are sending caution signals ⚠️ Volatility is picking up ⚠️ Liquidity could become a headwind ⚠️ Growth has started losing momentum vs. value ⚠️ Semiconductors are stalling That combination matters. $SPX can still hold up while fewer stocks carry more of the index. But when breadth keeps weakening, leadership becomes narrower and the market becomes more vulnerable to a catalyst. And this week has one. 🏦 The Fed meets Sept. 15–16. Markets are now heavily pricing a rate hike after stronge

The Fed may have more work to do. Based on the usual relationship between inflation expectations and the labor market, the fed funds rate would be closer to 5% right now. That’s more than 100 bps above the current 3.75% level. 👀 The bigger issue is what’s happening underneath the surface. 🔥 Inflation expectations have settled into a higher range. 💼 The labor market is heating back up and remains relatively tight. Put those two pieces together and the current policy rate starts looking less restrictive than it appears. The Fed’s recent hesitation may have bought some time, but the data is pushing the other way. Recent inflation data has already increased market expectations for a hike, while stronger employment data has added more pressure. 📊 The chart tells the story clearly. If inflation

The charts are starting to tell a slightly different story. $S&P 500(.SPX)$ is still near the highs, but the ride is getting less smooth. And some of the warning signs are showing up outside equities. Here are my biggest takeaways this week: 1️⃣ The S&P 500 is starting to wobble The trend hasn’t broken, but momentum is becoming less convincing. After such a strong run, even a modest pullback can expose how crowded positioning has become. 2️⃣ September weakness is showing up on schedule Seasonality is working against the bulls. September has historically been one of the weakest months for U.S. equities, so the timing of this slowdown isn’t exactly surprising. But seasonality alone isn't a short thesis. 3️⃣ Credit markets are starting to whi

Every so often you come across a chart like this where there is a big long-term technical tension playing out. Bears will highlight the Lower major Highs (drawing the red line), bulls will highlight the Higher major Lows (drawing the green line). Both of them are right, and that’s the point. The technical tension = simultaneous up & down trends vying for dominance. I’ve seen this type of thing play out many times before across different assets and markets, and the resultant move tends to be violent, substantial, and sets the tone for many years to follow. And I see this setup here as no different. But then you also consider the macro influence of the US dollar, and you realize that this is not just a major issue for asset allocators and traders, but something that could have far reachi

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $Cboe Volatility Index(VIX)$ Learnings and conclusions from this week’s charts: 1. Sentiment is still majority consensus bullish. 2. Stock correlations have dropped to record lows. 3. Volatility (VIX) looks low vs seasonals and single-stock metrics. 4. Semis are still stuck in the mud (peaked, and looking weak). 5. Software is looking stronger (software vs hardware trade reversing?). Overall, the market mood remains bullish and there are some bullish rotation trades underway. But the question is when does this consensus bullishness become complacency? There are a few flags of a potential volatility flare-up on t

Stocks beating Bonds should be no surprise for those paying attention. Stocks are in a raging bull market. Bonds are in brutal a bear market. But you might be surprised by the extent of it (see chart below). The rolling 10-year annualized total return spread (i.e. including interest for bonds, dividends for stocks) of stocks vs bonds just cracked 15% —the highest since 1960 (and eclipsing the 1929 high). $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ Looking at the two series separately (below) we can see bonds making long-cycle lows, and stocks making long-cycle highs in real (CPI-adjusted) total returns. I think it’s important to emphasize the word cycle, because there does appear to be some rhyth

This week’s charts continue to show a decidedly bullish market. 📈 Breadth is improving. The equal-weighted $S&P 500(.SPX)$ is starting to outperform the cap-weighted index, suggesting the rally is broadening beyond the mega-cap names. That’s generally a healthy sign for the market. 💰 Earnings are getting stronger. Earnings revisions are surging, with a solid macro backdrop providing additional support. At the same time, higher prices are boosting investor confidence, sentiment and equity allocations. ⚠️ But the rally isn’t risk-free. Seasonality is becoming less favorable, the Magnificent 7（ $NVIDIA(NVDA)$ $Apple(AAPL)$

The chart below shows the highest country PE10 ratio across time [with revolving membership] (e.g. standouts: Japan in the 1980’s, Finland in 2000, China 2007, Colombia 2010, India 2024, and more recently Taiwan & Korea + USA). The countries represented in the red line changed often. The key point is throughout this period there has very often been a country trading on a PE10 ratio in excess of 40x, and on occasion much higher. Overall I would call this chart an exercise in imagination expansion…

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $Dow Jones(.DJI)$ The chart below should be studied carefully by every student of the markets. It tells us a lot about how markets move, how things change, how investors behave, and how to think about markets as a long-term active investor. You probably have a few of your own views and ideas when you look at this chart —but here’s some thoughts that come to mind for me: Investor Behavior: everyone wants to own stocks at the top (when valuations are high), few want to own them at the bottom (w

The US Commercial Real Estate (CRE) market has just been through its third major correction in 40 years. Indeed, the 2020’s downturn has been similar in magnitude to the early-90s downturn and 2008 crisis. But a couple of interesting things stand out. First, those other two major corrections in the commercial real estate market sowed the seeds for decadal booms (a possibility that is completely out of mind for most investors as sentiment on real estate remains deeply pessimistic). The other point of interest is that the bottom looks to already be in, and prices are stabilizing and ticking up again... While there may still be risks, this is the type of thing investors should pay particular attention to, and is exactly the type of setup I hunt for in my work at Topdown Charts. Bonus Chart: R

$S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2609(ESmain)$ This obscure sentiment indicator just sounded another topping signal. The chart shows the ratio of trading in leveraged long vs short US equity ETFs. It surges when people are disproportionately betting on upside, and collapses then greed gives way to fear and bearishness. As you can see in the chart below, spikes in the indicator have flagged several short-term peaks over the past couple decades. Meanwhile plunges have helped flag numerous market troughs. Like most market timing indicators it does slightly better at picking bottoms than tops (as you might expect dur