Bear Markets are environments where a majority of stocks are falling in price for a prolonged period of time.

Sometimes you'll hear lies about a 20% decline defining such things, but that's just bullshit.

The number 20 is a completely arbitrary number that has absolutely no meaning. Thinking it does is foolish. Why 20? Why not 19.5? or 20.2?

There is no reason. They're just lies.

If you ever hear anyone say that, "A bear market is when it falls 20%", you know it's because they're in the entertainment business, not in the truth business.

Stay away from those kinds of people. They're not here to help.

It's their job to distract, it's our job to ignore.

In reality, expansions in the new low lists are things you’ll find near the beginning of market declines. You’ll see spikes in these lists that haven’t been seen in years.

Here's what this looks like coming into the week. It's still a ghost town:

From the desk of Willie Delwiche.

Key takeaway: After a healthy unwind over the past few weeks that allowed sentiment to reset to neutral, we are seeing optimism rebuild. This uptick in optimism has been accompanied by (as we show in our chart of the week) another breadth thrust. There is room for a further expansion in optimism before it becomes an excessive headwind - and continued broad market strength diminishes such a signal in any event. The combination of breadth thrusts and persistently elevated optimism is reminiscent of the late-2016 to early-2018 period. Then, equity ETFs saw 20 consecutive months of in-flows - we are currently in our 10th consecutive month of inflows (although the pace is quickening, with a record $100 billion over the past four weeks). Equities ran into trouble in early 2018 when breadth thrust tailwinds subsided but elevated optimism remained.

Sentiment Chart of the Week: Another Breadth Thrust 

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We don't need to make a whole thing about it. But I did just want to take a moment to thank everyone for the last 10 years.

I wrote my first blog post on this site in March of 2011. That was 10 years ago this month.

It’s been a pretty unbelievable ride ever since.

I don’t even know where to start. Hopefully one day I can write a book about it and tell you the whole story.

There are so many people to thank that we’d be here forever.

How often have we heard that sector rotation is the lifeblood of a bull market? Too often! And there's a reason why it's necessary to repeat this statement. At different stages of a cycle, varied variables are at play. This means that every sector will not move in a uniform manner.

Over the past three months, IT has been consolidating as other sectors took the lead. With sector rotation at play, it seems like IT is back in the mix.

Let's take a look at what IT is doing relative to Nifty 100. After breaking out of an almost 12-year base, Nifty IT has been holding on to the high levels displaying inherent strength. Bouncing off its support the ratio chart favours a positive move in this index going forward.

Click on chart to enlarge view.

Now let’s take a look at some actionable ideas at current levels that look attractive on the long side for the next few weeks and months.

TCS is hovering close to its resistance and looks good for another leg of the rally. The price is back above the crucial level of 3...

From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts

The same strong rotational currents that have been in place in the US since last summer have finally begun to spill over to International stocks... but, not all of them.

For the first time in about a decade, evidence suggests that stock markets around the world have finally built a strong foundation relative to their US counterparts, and might just be ready for a sustained period of outperformance.

How big the move will be and how long it will last are always some of the most difficult variables to predict. We can merely position ourselves accordingly based on the information we do have, and then be keenly aware of new data points as they come in, and constantly re-evaluate and adjust our outlook as appropriate.

As for the potential structural bull-to-bear reversal in the long-running trend of outperformance from US stocks... the seeds have definitely been planted for such a development to occur.

Now, we can only sit...

In the latest episode of The Money Game, Phil and I talk about the old cliché, 'Everything happens for a reason'.

It's funny because it doesn't. Not everything happens for a reason. What's the reason?

It's hard for humans to accept the element of randomness. Sure, good things can happen after a tough breakup or losing your job. Like you can meet your future wife or start a successful business, all after what seemed like a negative event in your life. But connecting the 2 dots is silly.

Now, it's perfectly natural for us as humans to want to do that, but it doesn't make it right.

We inherently want to learn, and how I see, the best ways to learn are from experiences. Some of the most important lessons I've learned came the hard way, for sure. And I can think back to those moments and I'm now thankful for them. But they certainly didn't happen specifically so I could use that information to my advantage today. They were just events that happened, that fortunately I learned from.

I think to believe that...

From the desk of Steve Strazza @Sstrazza.

Welcome back to our “latest Under The Hood” column for the week ended March 19, 2021. As a reminder, this column will be published bi-weekly moving forward, and rotated on-and-off with our new Minor Leaguers column.

In this column, we analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.

The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us...

From the desk of Willie Delwiche.

Key Takeaway: Small-caps hit pause but remain market leaders. Another breadth thrust shows rally participation remains robust. Bond yields are digesting recent rise, but the path of least resistance remains higher.

The Technology sector continued its descent toward the bottom of the relative strength rankings. It dropped to its lowest ranking since mid-2016 and fell out of the sector leadership group (which based on a three-week smoothing of the current ranking) for the first time in two years. Technology is joined in the cellar by Utilities, Consumer Staples and Consumer Discretionary. Cyclical value leadership remains intact. Even though small-cap groups led the way lower last week, our industry-group rankings continue to show leadership from small-caps and mid-caps.     

All Star Charts recently published a bullish report on the communications space. We're seeing strength in this sector not just in the U.S., but around the world.

One of the names that most interested me has some international flavor.

We've been talking about base metals and precious metals for quite some time now, highlighting the levels to track and trends to watch out for.

It's time to look at what's happening in the agricultural commodities space as well. In the past week, we saw some good moves in two names in particular and we're here to discuss just that.

From the desk of Steve Strazza @Sstrazza

What's the FIRST question investors should ask themselves and have a clear and concrete answer to before putting money in the market?

It is literally step one. The cornerstone of any strategy or trading plan...

What is my objective?

Every investor should examine this thoughtfully and keep it top of mind to ensure that their investment decisions are aligned with their investment goals.

Usually, the answer is pretty simple and comes down to maximizing returns, or more importantly minimizing losses, in a way that fits within each individual's unique preferences.

But as we'll explore in this post, this isn't always the case, and sometimes it can be a bit nuanced - as is the case with Environmental, Social, and Governance investment strategies.

So as an exercise let's put ourselves in the shoes of ESG investors and ask a few simple questions...

One of the charts that stood out the most to me during last week's Conference Call was the relative strength in Communications. While Tech and Discretionary corrected over the prior month, Communications marched on:

We saw that relative strength once again this week with Communications up and the Nasdaq down yet again.

And we're not just seeing new all-time highs on an absolute basis either. Relative to the S&P500, this thing continues to run:

From the desk of Steve Strazza 

Don't miss this weeks Momentum Report; our weekly summation of all the major indexes at a Macro, International, Sector and Industry Group level. As a reminder, we analyze this shorter-term data within the context of the structural trends at play.

This week we're looking at a long setup in the Power sector. Certain stocks from this sector are grabbing our attention and we're looking at one of those!

We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

In case you hadn't heard, Commodity prices are soaring. The CRB Commodities Index has practically doubled over the past year.

And while sure, many assets are up a lot over the past 12 months, it's the fact that the Commodities Index is above the 2016 lows that makes it a big deal for me. Same with interest rates. If the US 10yr Yield and CRB Index are above those lows, then inflation is here baby!

Get used to it.

We're seeing it across the intermarket landscape.

And speaking of landscape, did you see the Global Timber & Forestry Index breaking out to new all-time highs?

Our top-down macro approach keeps us in tune with the markets. It’s the backbone of everything we do here at All Star Charts. 

We’ve strived to stay true to our time-tested analysis by complimenting our top-down approach with several bottom-up scans we've implemented over the past 12 months. From Under the Hood and 2 to 100 Club to the Young Aristocrats and Minor Leaguers, we’re always aiming to give you the tools you need to succeed in any market conditions. 

Click here to watch a brief video of JC explaining our most popular scans!

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley

Overall, Commodities came under pressure this past week.

We noticed many markets running into resistance at former highs, and this was most prevalent in the Energy sector, with the exception of Ethanol.

Other areas of the Commodity space like Grains and Softs also showed short-term weakness. However, there were still some bright spots as usual.

Two of the markets that really stood out were Lean Hogs and Palladium.

First up, Lean Hogs broke out of a 6.5-year base, clearing its pivotal 2019 highs.

You know when Livestock futures are breaking out of half-decade long bases that Commodities are most likely in a bull market.

I believe the saying goes, "the bigger the base the higher in space."

If that's going to be at all true then we want to be buying Hogs above 98 with a target of 133.

Palladium also registered a nice move this week as this long-term leader in the Precious Metals space broke out of a 12-...

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Willie Delwiche.

The recent uptick in US Treasury yields has not been confirmed by other areas of the bond market (specifically Bunds & JGBs). Bonds at this point are extremely oversold and sentiment indicators are pointing to excessive pessimism. The caveat is that bonds are in a bear market and so this sort of behavior should not come as a surprise. Still, there may be some room for yields to consolidate or even pullback from here. If that happens, it could provide a chance for gold to gain some traction. Gold & bonds have moved similarly in recent years, though gold has started to firm up even as bonds sold off this week. What sort of retracement of their recent weakness either bonds or gold can achieve remains to be seen - but an opportunity for that may be emerging.