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

In a recent post discussing cyclicals, we posed the following question:

Are Energy and Financial stocks about to lead the market?

Cyclical groups are catching all the right tailwinds in this environment.

Crude Oil and Yields are pressing to new 52-week highs as investors continue to favor more economically-sensitive stocks and commodities in general. This is a bullish development and supports higher prices for some of the most beaten-down risk assets... even Financials and Energy.

As participation has expanded, we've been vocal about looking for the winners in each group without a sector bias based on relative strength.

When you really dive in and see what's going on, it becomes quite obvious that this will end in disaster for many investors.

Do you know why?

Because that's what always happens.

So what?

Why is that our problem?

What does that have to do with investing and helping my family?

If you take maybe just 30 seconds to study history, you’ll find that most uptrends were not bubbles. They were just uptrends.

There were things that happened this month and even last year that have never happened in the market before. There were even some events that only occurred a few times in history.

So what?

Every month and every year we see the market do things that it's never done before, or maybe has done very rarely.

If you really want to get into it, we see something happen every single day that rarely happens, if at all.

So what?

We can make a big to-do about it, if that's your modus operandi. Remember it's a lot of people's job to sensationalize everything. Way more people than you think. And in many cases, the ones with the loudest mics. 

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

Are we finally entering the long-awaited alt-season?

We're seeing incredibly healthy rotation within the Cryptocurrency space, which we can only interpret as support for higher prices for this group of digital assets moving forward.

We've been bullish on Bitcoin $BTC and crypto since last summer when BTC was near 10,000.

Here's a post in October where JC outlined that the path of least resistance was higher in BTC, and another in December where we outlined a target, which was hit in a matter of days. Our current target for the Crypto leader is 70,000.

The price action is clear: Crypto continues to benefit from a well-established uptrend.

Our main focus today is the broadening participation of many Altcoins (lingo for any Cryptocurrency not named Bitcoin).

This week marks the one-year anniversary of the top in 2020 for the S&P500, Dow Jones Industrial Average and Nasdaq100 Indexes.

Everything immediately fell apart after that and we experienced one of the greatest crashes in history.

This leads some people to think that with these indexes now making new all-time highs once again, a crash can happen at any time....

But what most people conveniently like to forget is that everything else had already been rolling over by this point last year. The only indexes left still making new highs were those 3 U.S. Large-caps.

Today, let's run it back to last year and see what was actually going on, so you can see just how different things are today. All of these charts are from posts and client presentations I gave last February.

First, take a look at Small-caps, Mid-caps and Small-caps all making lower highs by this point last year:

From the desk of Steve Strazza @Sstrazza.

We recently held February’s Monthly Conference Call which our Premium Members can access and rewatch here.

In this post, we’ll provide a summary of the call by highlighting 5 of the most important charts/topics we covered along with commentary on each.

Let’s dive into it.

The need to be right vs wanting to make money. Every trader has to solve this problem and it's not easy.

On this week's podcast I sit down with Dr. Andrew Menaker to talk about what he refers to as "Your Inner Market".

You guys already know how much I love a good chat about investor psychology, so this was really fun for me.

I hope you enjoy!

We're getting long oil.

There I said it. Now I'm going to go hide behind my oil derrick while the EV bros throw their rechargeable batteries at me.

Don't hate the player, hate the price action.

This is the video recording of the February 2021 Conference Call.

From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

We continue to harp on the risk-on themes that support our bullish macro thesis.

Rotation down the market-cap scale, commodity strength, and defensive alternatives making new relative lows have been some major themes we continue to see play out.

From the desk of Willie Delwiche.

Key Takeaway: There is ample evidence of investor complacency, optimism, and aggressive risk-taking.

The behavior of the broad market (another breadth thrust last week and the weekly NYSE + NASDAQ new high list is at its highest level ever) suggests some of this may be justified.

Sentiment is likely to become a more acute headwind when rally participation narrows and/or optimism remains elevated in the face of market volatility.

For now, optimism has been revealed as a mile wide but only an inch deep, with concern rising the moment the market stops rallying.

If you're ignoring the Indian Stock Market, I think you're doing yourself a huge disservice.

Even if you never plan on trading stocks in India at any point in your life, it doesn't matter. There's amazing information coming from there.

For example, take a look at that relative strength in Indian Bank stocks before US Stocks, and Stocks in general, rallied throughout 2019. That was an epic rally, if you recall.

The Indian Banks had already been telling us that it was coming!

From the desk of Steve Strazza @sstrazza

If Bitcoin's run to $50,000 or the latest YOLO stocks aren't too distracting right now, you might have noticed Crude Oil just registered new 52-week highs for the first time since fall 2018.

Or maybe you're ahead of the curve and caught our post about the Energy Sector experiencing what looks like a bullish initiation thrust just a few weeks ago.

Or perhaps you saw Financials just closed the past week at fresh all-time highs... finally breaking out after almost 15-years of no progress!

On top of all this action, the US 10-Year Yield is also pressing on its highest level in almost a year.

It's clear that more cyclical stocks and economically sensitive Commodities are taking on leadership roles. We're in quite the risk-on environment.

Considering the evidence we just listed, it's finally time to address the elephant in the room...