Weekly Macro Review

January 23, 2022

Chart Highlights

Overall the markets took a big hit this OpEx week and barely came up for air in short intraday spurts. The stretch short term is getting there quickly I would expect some retrace here soon.  It is getting to a breadth level that often turns reflexive which can take back the most extreme portion of the stretch quicker than most can react. Almost everything was negative on the week other than bonds and a few commodities. From the world view, the US is on the bottom and the gainers for the week were mainly Latin America and Middle Eastern. Other developed countries fell more in the middle.  Brazil  $EWZ $EWZS made big gains on all measures this week. Worth and eye in the coming weeks and may be working on a larger reversal or basing action after a long relative underperformance. 

Below is an example showing the outperformance of oversees equities over the US. $UAE Vs. $SPY is United Arab Emirates ETF vs the S&P. The ETF made 4 consecutive higher lows over 2021 showing sustained outperformance over the S&P. The recent breakout come amid the selloff in US equities and UAE has outperformed by over 10% in the last 6 trading sessions.

The commodity complex remains the clear leader in the Intermarket list, but the corresponding stocks didn’t escape the losses with all other equities.  Equities at the bottom of this list is not a setup we like to see either, so watching for improvement on this list will be a decent piece of evidence when it happens. $DBA $SLV stood out this week with $USO $DBC  as solid gainers in a tough environment.  $TLT gains Friday might be worth checking further into.  Could be an area that turns earlier if the inflation narrative starts to get overplayed. Not there yet, but worth keeping in mind.

Every sector got hammered this week, No exceptions.  Utilities gained RS by holding up the best, but still a solid loser. Not many places to hide this week, usually closer to the short-term climax than the beginning of the drop. We have room to go lower, but we got here very fast; not many like his other than March 2020. Velocity seems much faster in both directions these days.

Also look for our Power Sector Review for a closer look under the hood.  you can find these and other charts on our Stocktwits and Twitter feed @Power1nvesting and throughout this site.

As always, I hope this helps!