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Alfonso’s Daily Note

Nuclear Power Breaks Out

October 17, 2024

When I think about the strongest stocks, I’m not just looking for outperformance across different timeframes. The strongest stocks should be back to our through their old bull market highs.

Let’s discuss the materials sector in this light.

The bubble chart below shows the change from the 2021-2022 highs on the Y axis and the 3-month relative change on the X axis. I'm graphing all the materials industry groups to see how they stack up.

Alfonso’s Daily Note

Assessing Credit Spreads

October 15, 2024

When I think about bonds, credit spreads are always at the top of my mind because they provide an excellent gauge of market health.

We simply measure the yield difference between a Treasury bond and a High-yield bond with the same maturity.

Another way to do it is by looking at the prices of the High-Yield Bond ETF $HYG compared to the Treasury Bond ETF $IEI:

Alfonso’s Daily Note

Record Week for China

September 27, 2024

Chinese equities are surging like never before in history.

The iShares China Large-Cap ETF $FXI rallied over 18%, marking its best week ever.

We call this a "momentum thrust". Such extreme readings often precede rallies and tend to occur at the beginning of new bull cycles.

Here's the FXI chart with the 1-week rate of change in the lower pane:

As you can see, this is happening after a test of a critical support level, right at a shelf of former lows.

Alfonso’s Daily Note

Silver Is Breaking Out!

September 24, 2024

Precious metals continue to show strength as both gold and silver hit new highs in today's session.

First, it was gold leading the charge, and now silver is making its move.

Let’s take a look at this silver futures chart:

As you can see, silver is breaking out of a multi-year base, with momentum accelerating sharply to the upside.

Alfonso’s Daily Note

Gold Continues to Shine

September 12, 2024

Gold has been getting a lot of attention lately as it presses against its highest levels in history.

This is an exciting time to be a gold enthusiast.

Just look at what the price is doing.

Here's a long-term chart of gold breaking out to new all-time highs:

All Star Charts Premium

Financials in Focus

May 9, 2024

From the Desk of Alfonso Depablos @AlfCharts

As equity markets continue to repair the damage from April’s correction, we continue to find more and more stocks -- and groups of stocks -- that we want to be buying.

A growing number of those groups are coming from the financial sector. 

Financials have made a comeback in the last week as a handful of financial indexes and individual issues are reclaiming their prior-cycle highs.

The relative trends are improving as well, with the large cap sector SPDR $XLF hitting new 52-week highs versus the S&P 500 recently.

When we think about the strongest stocks within financials, asset management and capital market stocks are top of mind.

In today’s post, we will dive in and outline some of our favorite charts in the space.

Before we do that, here’s the SPDR S&P Capital Markets ETF $KCE pressing against its former highs from 2021:

Failed Breakouts Everywhere

April 19, 2024

From the Desk of Alfonso Depablos @AlfCharts

2024 is far from being like 2023. 

While we’ve experienced some healthy sector rotation, the first quarter was characterized by waning momentum.

With these long-standing momentum divergences in place, so far, the second quarter has been characterized by selling pressure. 

Since last week, we’ve seen an increasing number of these divergences confirmed by price. 

Making matters worse is where this downside is taking place. We're also seeing a growing list of indexes and sectors lose key former highs.

Until the bulls can reclaim these polarity zones, markets will remain messy. 

Let’s talk about some of them.

April Strategy Session: 3 Key Takeaways

April 5, 2024

From the desk of Steve Strazza @Sstrazza

We held our April Monthly Strategy Session earlier this week. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

Materials Break Out

March 28, 2024

From the Desk of Alfonso Depablos @Alfcharts

A major theme we've witnessed in recent weeks is a shift in leadership as sector rotation continues to spread across the US equity market.

One could argue it is more a general broadening of the rally than it is rotation.

Regardless, one of the major beneficiaries has been Materials.

With commodity markets getting back in gear, industry groups from copper and steel to agricultural inputs are showing strength again.

With broad participation beneath the surface, this is a group we want to be adding long exposure too in the coming days and weeks.