Good morning,
By now, everyone is aware of the ABBT (Anything But Big Tech) trade, the Lag 7, or whatever you want to call the fact that everything on planet earth is working except the US’s largest mega-cap growth stocks.
The natural next question is: How long will this last?
I don’t know, and nobody else knows either.
We’ve seen this trade for brief periods over the past 15 years, but it hasn’t lasted long. But as I’ve said plenty of times before, charts aren’t really about predicting the future.
We can look at things like overbought conditions and sentiment to tell us if a trade is getting long in the tooth (this one certainly isn’t), but ultimately, we just want to position for the environment we’re in, and change our minds when the facts change.
Right now, that means having less of the Mag 7 than the benchmark (pretty easy to do) and more of almost everything else, but especially cyclicals and international stocks.
Today’s report will review some of the best tactical and long-term charts in those areas, as well as:
The key level to watch on the 10-year yield
Market performance during our break
Major index technicals
Oil breaking out, plus another warning sign for silver
and more!
