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Relative Strength

Apr 18 2019

Small Caps And The Recent “Rate Hike”

  • Apr 18, 2019

The 1999 leadership parallels we discussed in the latest Green Book remain intact—U.S. over foreign, Growth over Value, and Large over Small. Small Caps have given up most of the “beta bounce” enjoyed in the first two months off the December low, with one Small Cap measure—the Russell Microcap Index (the bottom 1000 of the Russell 2000)—undercutting last year’s relative strength low and those of 2011 and 2016.

Apr 05 2019

Small Cap Biotech Getting Pricey Again

  • Apr 5, 2019

In May 2015, we warned about rich valuations for small cap Biotech stocks and looked at various ways to evaluate those companies, as the majority have no approved drugs on the market, thus no revenue; therefore, valuing these companies using the conventional methodology is problematic.

Oct 05 2018

Rates Are Already Clobbering Consumer Stocks

  • Oct 5, 2018

“Three steps and a stumble” was the old rule of thumb for timing the impact of Fed tightening on the stock market.

May 05 2018

Consumer Discretionary Holds At #1

  • May 5, 2018

This year we’ve written several notes surrounding the Consumer Discretionary sector’s prominence among our top Group Selection (GS) Scores. This pattern persisted for a fifth consecutive month in April.

Mar 07 2018

Leverage Factor: A Boost For High Quality Stocks?

  • Mar 7, 2018

A review of Quality factors, as well as the lower valuations of High Quality stocks, supports the current High Quality cycle amid rising market volatility. The Leverage factor may provide particularly strong backing for High Quality stocks.

Feb 07 2018

Implications Of Extreme Momentum

  • Feb 7, 2018

Historically, leadership and breadth accompanying an upside market move is far more predictive than the pure momentum of the move. But when intermediate-term momentum is not just strong but exceptional (as it was until just recently), there has usually been even more upside to follow.

Aug 05 2017

Troubling Transports?

  • Aug 5, 2017

Does the last few weeks’ stumble in the Dow Jones Transportation Average foretell anything sinister? Not on the face of it.

Aug 05 2017

High Beta Breakout?

  • Aug 5, 2017

Last month we spent a full page explaining why the underperformance of the S&P 500 High Beta Index was not a bearish portent for stocks (Chart 1).

Sep 08 2016

What Are The Transports Telling Us?

  • Sep 8, 2016

The MTI’s subset of Momentum measures entered September at a 6 1/2-year high reading of +1028, with only two of the category’s 40 inputs in bearish territory.

Aug 05 2016

Divergence Among Quality Factors

  • Aug 5, 2016

Performance and valuation of the three Quality factors are diverging. From a valuation standpoint, we might see a reversal in performance, with the Stability factor weakening and the Leverage factor strengthening.

Jul 08 2016

Discretionary: Is The Top Finally In?

  • Jul 8, 2016

Sector swings have been wild enough thus far in 2016 that Consumer Discretionary’s relative weakness has drawn little commentary.

Jul 08 2016

What Are Banks And Bonds Telling Us?

  • Jul 8, 2016

Last month we noted that European and Japanese banks were among the worst-looking industry indexes among the hundreds we monitor—and both groups obliged by dropping 15-20% in the last month.

Jul 08 2015

NASDAQ Apathy?

  • Jul 8, 2015

The NASDAQ has solidified its grip on 12-month leadership, rising 11% versus a 4% loss in the NYSE Composite. A surprising feature of NASDAQ’s relative strength dominance is that is has not been accompanied by a rise in relative volume.

Jun 05 2015

Transports Still Troubling

  • Jun 5, 2015

The Dow Jones Transports lagged the market badly again in May, and continues to stand tallest among the red flags we’re now monitoring.

May 08 2015

Emerging Markets: Close… But Not Quite

  • May 8, 2015

Emerging Market stocks are probably the cheapest equity subgroup in the world today, trading at 13.0x our 5-Year Normalized EPS estimate—much lower than that of foreign Developed Markets (17.6x) and the S&P 500 (21.3x). But, EM stocks have languished near these valuation levels for almost three years.

Feb 06 2015

2015 Leadership: An Early Take

  • Feb 6, 2015

Last year’s economically defensive winners held their grip on stock market leadership in January. This action is consistent with our view that the bull market is an aged, overvalued one that has begun a final “distribution” process that will eventually erupt into a cyclical bear.

Jan 08 2015

High Quality Cycle In Force; Ideas For High Quality Energy Stocks

  • Jan 8, 2015

In early October 2014, we noted the momentum reversal of Low Quality stocks and a few signs of the likelihood of transitioning to another phase of the quality cycle. The official numbers of Q4 have confirmed this.

Jan 08 2015

Asset Allocation & Sector Strategy: Follow The Trend, Or Fade It?

  • Jan 8, 2015

We are nothing if not contrarians, but have also highlighted the hazards of “knee-jerk” contrarianism—in which investors are instinctively drawn to the asset, sector, or stock that is down the most in price in the recent past.

Dec 05 2014

Gruber The Guru?

  • Dec 5, 2014

Last month’s tactless comments from MIT health care economist Jonathan Gruber contained an (accidental) investment nugget we’ve alluded to several times in the last three years (and, no, it does not relate to the “stupidity of the American voter” or investor).

Jul 08 2014

Beware Bond-Like Stocks

  • Jul 8, 2014

We certainly have nothing against dividends, but for more than a year we’ve believed that high-yielding themes like the Utilities, REITs, and the S&P Dividend Aristocrats have become so popular they’re likely to disappoint their new owners for a while.

Jun 06 2014

The Tech Wreck That Wasn’t

  • Jun 6, 2014

Although the social media darlings haven’t recouped their losses, the Technology Index moved to new cycle highs in early June.

Aug 07 2013

“Immature” Market Behavior

  • Aug 7, 2013

Whether one considers the post-2008 upswing two bull markets or one ultimately matters only to those who (like us) enjoy cataloging such things. But labeling the 2011-2013 rally a new bull market would certainly explain some of the “immature” behavior exhibited by U.S. stocks in recent months.

Dec 06 2012

An “All-Clear” Signal From Retailers?

  • Dec 6, 2012

Retail stocks barely paused during the September-November market setback, and have lately shot to new all-time relative strength (RS) highs. We were recently asked whether this bullish behavior was effectively an “inoculation” against falling into recession over the near term. 

Oct 04 2012

Leuthold Stock Quality Rankings: Starting To Favor Low Quality

  • Oct 4, 2012

Our Stock Quality Ranking work currently shows stocks with low quality rankings outperforming those with high quality rankings.

Jan 05 2012

Leuthold Stock Quality Rankings

  • Jan 5, 2012

Leuthold Stock Quality Ranking work is currently showing that High Quality stocks outperformed during 2011. More upside for High Quality stocks going into 2012?

Dec 04 2010

A “Quality” Opportunity?

  • Dec 4, 2010

Low quality stocks led out of the past bear market, as typically occurs. Despite being the clear winners from the 2009 lows, it looks like the lower quality stocks can continue to outperform given current valuations and momentum.

 

Oct 05 2010

Back Aboard The Bull

  • Oct 5, 2010

Major Trend Index now Positive (both global and domestic). Even though we are bullish, there are several bullish arguments that we still don’t buy.

Dec 02 2008

Technical Comment: Momentum “Divergences” Are Now In Place

  • Dec 2, 2008

The November leg down in stocks was brutal. However, from a technical perspective, the decline was accompanied by the kind of  “positive divergences” that typically appear at major lows.

May 05 2004

Our Work With Beta Adjusted Relative Strength Pays Dividends

  • May 5, 2004

Over the last few years, we have been employing a beta adjusted relative strength calculation for high beta groups, along with the traditional relative strength. There are often more revealing signals given by the beta adjusted relative strength, especially in recent years.

Aug 05 2002

Tech Watch

  • Aug 5, 2002

Fundamentals continue to build for technology, but prices yet to react…..Evidence that tech fundamentals are now improving.

Jun 05 2002

Relative Strength: Its Value.....And Its Limitations

  • Jun 5, 2002

Content from Steve’s recent speech given at the Annual MTA seminar in Jupiter, FL.

Oct 05 1997

Is Move in Secondary Stocks For Real?...Yes

  • Oct 5, 1997

Small caps continued to outperform in September’s strong market. Improving small cap earnings and sales momentum. Improving sponsorship (so far) from aggressive and emerging net fund inflows.

Aug 05 1997

Technology: Short Term We Have Egg On Our Faces…BUT

  • Aug 5, 1997

Technically, even after July’s move, the relative strength line is closer to breaking down (below 70) than it is to making a new high above the 1995 peak (above 80).

Jul 05 1997

Has the Market Lost Technology Leadership?

  • Jul 5, 1997

In 1996, and so far in 1997, the broad based technology move has been breaking down. The relative strength line of the Technology Composite index tells the story.

Jan 05 1996

Technology Stocks: What Now?

  • Jan 5, 1996

The back of the technology sector’s market leadership role has been broken, fundamentally and technically.

May 05 1993

Sector Musings

  • May 5, 1993

Notes on Regional Banks, Health Care and the “Branded Stocks”.

Jun 03 1982

Inflation Resurgence? Be Ahead of the Crowd

  • Jun 3, 1982

It’s time to start looking but too early to start buying. In this issue the groundwork is laid for being ahead of the crowd in timing a potential move back into the traditional inflation hedge stocks. A new conceptual stock grouping is introduced (The Inflation Resurgence? Index) and the current status of some inflation monitoring tools is reviewed. If a re-entry can be timed well, a profitable tactical move may be in store sooner than most now expect.