How's the market done in 2021?

That's a tough one to answer.

And I'll tell you why.

January was still what most of 2020 was like. The environment isn't going to change based on the calendar year. It's going to do what it wants.

From the desk of Willie Delwiche.

Key takeaway: Sentiment continues to argue a case for caution. Pessimism remains near historical lows. Nasdaq trading volume dwindles along with risk-seeking behavior. And with the economic surprise index slipping below zero, better than expected economic data no longer provides a tailwind. Yet, pockets of strength remain (including the earnings revision trend) and optimism has ticked higher across our sentiment indicators. Active investment managers have increased their exposure, throwing caution to the wind during a seasonally challenging period. All this does not lessen the real risks associated with the lopsided sentiment that tilts toward extended optimism.

Sentiment Report Chart of the Week: Analysts Still Playing Catch Up

The earnings revision uptrend has slowed its ascent in recent weeks, but it continues to move higher. Overall earnings expectations for 2021 have risen by nearly 20% since the beginning of...

Whenever Frances calls to chat about the market, she knows she's getting a yes!

Frances Horodelski and I have been doing this for about a decade, through multiple cycles. It's always fun!

She was hosting a commodities-focused show today so we discussed Metals and Energy.

I think there is a lot going on in this space and it's setting up for a big move.

We couldn't help but talk Financials and Crypto, but it was mostly Commodities.

Hope you enjoy!

The latest Follow the Flow report is out, and as always there is a play therein that caught my attention.

It's a bullish idea, but I'm going to play this one in a unique way in order to hedge myself a bit in a tape that feels a little sluggish at the moment. I want to get paid to wait out the slow times we're likely to "enjoy" from now until Labor Day weekend, and possibly beyond. So this will involve a calendar spread, but with a twist...

From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return 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 consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

We've been pretty obnoxious about our position that markets are a total mess these days. While this remains the case, we've seen some positive developments play out lately... particularly the renewed strength from cyclicals and offensive assets.

We've covered the best evidence from both the bulls and bears camp in recent months, and even played devil's advocate with the data we...

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

The US Dollar Index $DXY has been a good reminder that price doesn’t always move in a straight line. 

Paul Tudor Jones has been quoted saying “markets only trend about 15% of the time.” The textbooks will tell you it’s somewhere between 20% and 30%. But it all comes down to how you’re measuring it.

We think it’s fair to say most markets trend about 25% of the time on a structural basis.

And the present year two market conditions have been a great illustration of what they look like the other 75% of the time… range-bound... sideways... a hot mess.

Speaking of which, last week, we pointed out that Dollar strength had stalled and that things were beginning to look messy on shorter time frames. 

Many of the long USD trade setups we laid out in late June have yet to break out and are currently testing their...

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: Because they think the stock is about to move in their direction and make them a pretty penny...

The market has spoken.

You might have your conspiracy theories about market manipulation or inflation or whatever story they're telling these days.

But it's only the price that pays. We just want to sell things at higher prices than where we buy them.

And you're going to have a hard time finding a worse investment over the past year than Precious Metals.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood" column where we'll cover all the action for the week ended August 6, 2021. This report is published bi-weekly and rotated on-and-off with our "Minor Leaguers" column.

What we do here is 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.

Watch this video for a "behind the scenes" look at our process.

...

"JC, Technical Analysis is just a Self-fulfilling Prophecy"

Where do I even start...

I just can't with this one.

A statement that technical analysis is self-fulfilling is suggesting that there are events in the free market that are caused directly or indirectly by the preceding prediction or expectation that it was going to occur by a group of market technicians.

Seriously?

Is Bill Gates sticking chips in our arms too?

Is the Earth Flat?

It's Saturday Morning Chartoons time. 

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

The talk around town this week is the potential "double bottom" in US Interest Rates. 

You can see that here along with the higher low in the highly correlated Regional Bank stocks:

Is the resiliency in Copper pointing to higher rates?

You can see Copper relative to Gold here and how closely the ratio moves with rates:

The strength in Copper and other base metals is impressive. We dove into it on this week's Live Strategy Session along with our favorite Steel Stocks to take advantage of these trends.

But it's the weakness in Gold that really stands out. No one wants...