Intermarket Update

A quick weekend post with 10 charts I’m watching. This is a follow-up to a post from two weeks ago: Key Intermarket Levels.

Stocks

Both the IWM and QQQ weekly charts continue to inch towards a breakout after a healthy 4-month consolidation.

The equity area that has me most interested right now is tech/growth. I originally wrote about the emerging strength in this May 24th post: Setups in Tech. Since then, lots of growth stocks have made breakouts or are nearing ATH’s. I will do a separate post on this soon.

Bonds & US Dollar

The big event this week was TNX (10yr Treasury Bond Yield) breaking support. This relief in yields could be helping growth stocks relative to value.

HYG:TLT, Daily. This is a measure of risk-on. It also made a breakdown this week.

USDX, Weekly. Showing strength off of support.

Dollar strength and falling bond yields could put pressure on commodities, which we’ll look at next.

Commodities

As the chart below shows, Bitcoin has tracked the inflation trade quite closely.

Is the weakness in Bitcoin (and strength in USD & bonds) going to pull down commodity ETFs like Copper, Steel, and Uranium?

Commodities have certainly had a monster run and a pullback here would be very logical. Especially given that some of the largest stocks in the energy space are hitting major resistance.

Commodity-linked currencies like CAD and AUD are also struggling at multi-year resistance.

Summary

The broad equity market looks healthy, with tech being particularly bullish.

Meanwhile, the recent strength in USD & Treasury Bonds, combined with weakness in Bitcoin, could be a sign to lighten up on the red-hot commodity ETF’s in oil, steel, copper, and uranium sectors.

Last week, I wrote a post here about how value stocks could have another 5-10% more outperformance over growth before growth regains leadership for the long term. That move back into growth appears to already be happening, especially in leading tech stocks.

Alright that’s all for now, have a great weekend!


Important DisclaimerThis blog is for educational purposes only. I am not a financial advisor and nothing I post is investment advice. The securities I discuss are considered highly risky so do your own due diligence.