Weekly Macro Review

January 31, 2022

Chart Highlights

A significant change from last week is shown with the S&P RS movers in the World ETF rankings. This is improvement as U.S. equities have underperformed lately. Friday’s move will need to see some continuation early this week to be meaningful.

Looking at short-term breadth gives us a quick assessment of how the market internals are. This is certainly a different view from recent history as we have minimal red in the new low column. If we get continuation this week we want to see an expansion of breadth and the new 10 day high column showing green. It will be something to monitor as we get the new information.

Sorting by weekly performance shows what outperformed on an absolute basis. Mega cap growth was the leader and follow by mega cap value. It’s interesting to note that from top to bottom, mega-cap outperformed while micro-caps underperformed. This means that during the end of week rally, mega-caps got the bid. 

Below is the Mega Cap Growth Index MGK divided by the Micro-Cap ETF, IWC. We can see that there have been two clear bases in the relationship and it is set to break out again early this week. Mega-cap growth will be something to watch this week as this relationship breaks out, or doesn’t. Both of which is useful information.

We cover all of this and more in the video at the top of the page.  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!