From the desk of Willie Delwiche.

Key Takeaways:

• Bonds and gold see double-digit declines in Q1
• Technology & small-caps vulnerable to further rise in yields
• Tangible sectors of market showing strength & leadership

One of the biggest stories of the first quarter has been the dramatic rise in bond yields. The Federal Reserve has repeatedly stressed its willingness (even desire) to let the economy run hot. In doing so it has kept the short-end of the yield curve well-anchored. The long-end of the curve, which is impacted by the hopes and fears of bond traders more than pronouncements by the Fed, has seen yields move higher. The yield on the benchmark 10-year T-Note came into the first quarter below 1.0% and has risen above 1.7% as the quarter winds down. The 10-year T-Note yield is finishing the quarter at its highest level since January 2020. As important as the absolute level of bond yields is the turn higher in the longer-term trend and the pace at which that...

Anybody else tired of the big banks? Their lack of personal attention, the formulaic approach to lending, the fees, etc?

I stopped banking with "big banks" a long time ago, now doing my personal and business banking with a local bank in my community.

So it's nice to see the team talking about bullish developments and trade ideas in the Regional banking space in the latest RPP Report.

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 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.

While the same themes we've laid out in previous reports continue to hold strong, we have seen some recent deterioration, particularly in the large-cap sectors and indexes.

Despite an increase in bearish developments, the overall weight of the evidence is still firmly in the bull camp, and we remain aggressive buyers of stocks and risk assets, particularly over any longer-term timeframe.

It is also very important to consider the recent volatility within the context of the primary trend... which is still unequivocally higher in EVERY major US Index.

Over the upcoming weeks, our view is that many of the recent leaders are likely to consolidate at logical...

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Thursday April 1st @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Thursday evening:

From the desk of Willie Delwiche.

Key takeaway: The evidence continues to suggest we have recently undergone a healthy unwind in excessive optimism. Investment manager’s equity exposure has dramatically pulled back from extreme readings but remains above levels that signals a shift toward risk aversion risk that can weigh on price. Combining that with budding optimism among individual investors and a supportive, neutral backdrop in sentiment arises. Though global markets lack strength from a tactical perspective, the message remains digestion over deterioration given recent breadth thrusts and that the majority of international markets are in uptrends. For now, the reset in sentiment provides upside potential for both optimism and price.

Sentiment Chart of the Week: Risk Appetite Remains Healthy

The recent unwind in optimism has been met with sustained risk appetite levels. Both High Yield Bonds and Copper hold...

One of my favorite things to talk about is Behavioral Finance and Investor Psychology. The whole thing is incredibly fascinating to me. That's why I was super stoked when Dr. Daniel Crosby invited me on his Standard Deviations Podcast.

Usually I'm the one asking him the questions, but this time he flipped the script. This was a lot of fun!

One thing they don't teach you in the books is the old Technical pattern, "The Hot Mess".

You know when you look at a chart just churning sideways....

Probably trading near flat moving averages....

Below overhead supply....

There's no real edge in either direction....

Traders are getting chopped up in what feels like quicksand....

That, my friends, is a Hot Mess.

The market has been moving sideways for two months now. But that does not mean that every sector will reflect the same move.

As the story of a market cycle unfolds, various sectors assume importance just like different characters in a play. Currently, the Chemicals segment is in the spotlight so let's see what its constituents are up to!

The Chemicals segment has been showing strength over the past few days with some interesting setups lined up. We included one such setup in our Trade of the Week post.

First up, we have Pidilite Industries which is now moving back into positive territory as it inches towards its overhead resistance at 1,800. The price has consolidated in the range of 1700-1820 and looks ready for a breakout as the indicator attempts to move higher. With the overall sector in focus, Pidilite could be dolling up to participate in the next leg of the rally.

We are bullish above the risk management level of 1,820 with a target near 2,030.

Click on chart to enlarge view.

...

From the desk of Steve Strazza @Sstrazza

In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."

We write a post every other week where we outline some of our favorite setups from this universe of stocks.

We've already had some great trades come out of this column and couldn't be happier about the early feedback.

Moving forward, we'll be rotating this column with "Under The Hood" each week.

In order to make it onto our Minor League list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.

Then, we simply sort the stocks by their percentage from new highs. Easy done.

The idea is to catch the strongest names while they're still small and have serious upside potential. If any of these stocks ever climb up the ranks...

From the desk of Willie Delwiche.

Key Takeaway: Even with bottlenecks & distortions, economic recovery & cyclical rally remain intact. Tactical risks have risen as the market digests gains of last year. Watch bond yields & global participation for evidence that the rally is ready to resume.

Cyclical value sectors remain the leaders in our relative strength rankings and small-cap groups continue to dominate the upper-tier of our industry group rankings. But there is evidence beneath the surface of shifting trends. Rather than seeing a reversion back to growth leadership in our sector rankings, we are seeing defensive areas of the market start to heat up. Consumer Staples, Utilities & Real Estate have the best relative strength on a short-term basis. At the industry group level, small-cap groups are deteriorating while large-cap groups are improving.       

The latest 2-to-100 Club Report is out with a handful of actionable names to participate in.

These aren't trades where we expect a face-ripping rally to imminently commence. But we do think there are underlying trends that can propel these names higher over the next 3-6 months.

With that in mind, I've got a trade in November options on deck to play one of my favorites from this report.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize it objectively.

While you can try to guess the chart, the point is to make a decision…

So let us know what it is… Buy, Sell, or Do Nothing?

This week we're looking at a long setup in the Chemical 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 the wake of this week's events, I thought I would take a moment to remind everyone that nothing should surprise you.

The longer you're in this game, the more things you see. The newer you are at this, the easier it is to not know some of the history of markets.

And that's okay. You don't have to know everything the moment you start.

That's what the experience is for.

But I will let you all in on a little secret, regardless of how long you've been around:

From the desk of Steve Strazza & Grant Hawkridge

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.

We're looking for trends.

That's why Technical Analysis works. Because stock market returns are not normally distributed. We have the data. It's not a secret.

Stocks trend. They go up for a while, they go down for a while and sometimes they can go sideways for a while.

Interest rates, commodities and currencies all act the same way. That's just how markets behave.

You can choose to pretend that it's not that way.

But we have the math that proves that it is.

So that's why we do this. That's why we rip through thousands of charts every week to identify which ways things are going.

All things.

Here's one of the biggest charts that continues to point to any choppy environment just being part of a bigger uptrend for stocks and risk assets:

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

Similar to last week, many areas of the Commodity space continue to chop sideways below overhead supply.

Healthy digestion of recent gains makes total sense given the explosive moves since last summer and in many cases is much needed.

Given that sideways price action is the main theme across Commodities at the moment, one particular consolidation stood out this past week.

And that consolidation is in the Corn market.

Corn futures have ripped off of their March-2020 lows, taking out key multi-year highs along the way.

Earlier this year it broke above a key Fibonacci level and its 2014 highs, and is now taking a breather in the form of a potential 8-week Flag or Pennant formation. These types of consolidations often resolve in the direction of the underlying...