Weekly Macro Review
January 17, 2022
One thing we have to be open to from a Macro view is the US Out performance is waning for now. With our domestic ETFs no where near the leaders here, it may be worth finally inching up the global equity allocations for now. Many other developed nation ETFs are at or nearing highs and potential breakouts. Below we have sorted and shown both the RS Gainers and RS Losers from the World ETF List so we can see what is moving the most this week. Both lists have some nicely setup charts in them like $EWQ $EWO $EIS $EWP $EWC $EWZ
Next we look at the Intermarket view by ranking all of the asset classes with each other.
To show the extra volatility and bifurcation of the markets right now I wanted to highlight the PMNHL chart for the Power Universe. This chart shows while we are seeing new highs persist across all three measures, we are also seeing the number of new lows grow on the longer two measures more over the last week while the shorter measure has not. Software and Biotech are two spaces with a lot of components helping push these longer term lows and should be noted.
This bifurcation continues to provide opportunities inside a tough environment. Energy has continued to lead and as we said last week, many subsectors and individual charts have made big moves, but continue to look like they are ready for more. But other areas like Communication Services are putting in some stakes after a long and drawn out decline. This sector has been in our focus for a few weeks now, and while still a laggard from our RS readings, it is starting to move and many trend reversal plays are popping out in the space.