Episode 212: Thin

In this week's episode, Ian and Kevin discuss breadth and the continued thin nature of this market. They also touch on sector relative strength, metals and miners, the Yen, and the U.S. Dollar. 

Transcript

Ian 0:27

Welcome back to the weekly trend podcast. Today is June 28th 2024 S& P 500 sitting at a as of this morning yet another All time high. We're above 5, 500. So 5, 508 on the S& P. How about that?

Kevin 0:53

Yeah. Canary. I'm eyes, right?

Ian 0:55

time high. Some would say it's just trends being trends. Breadth really hasn't fixed itself. We were chatting on here before we got on Kevin and Obviously, here's some of the stats here in a, in a minute. But yeah, another all time high. And it has continued to be still a large, mega cap and large cap Tech I mean to your point, I mean more like 10 names.

Kevin 1:25

Yeah. It was looking at some of like the contribution rates for the return of the S and P over like the last month and three months.

Ian 1:32

Mm hmm. Wow,

Kevin 1:34

so over the last month basically Apple and the video and Microsoft is made you know, 50%. Of that return in the SMP and really, you know, if you keep kind of going down the list like kind of like the top 10 on there, it's basically You know amazon broadcom meta lily's in there, which is kind of an outlier, I guess you know lily's usually pretty strong. And then tesla and google, you know It's kind of all those names have essentially made up like around 85 Of the past month's return in the SMP And it's even more narrow if you look at the last three months. So NVIDIA, Apple, Microsoft made up 73 percent of that return. And if you kind of go through roughly that same list, you know, like Google, Amazon, Broadcom, Lilly, Tesla, even kind of Costco works in there. Those names actually make up over a hundred percent of that contribution. So really, you know, the remaining 490 some stacks of either kind of. You know, it's been roughly around flat or actually detracted from the SMP return So even kind of paints a much more, you know narrower Picture or really just kind of the participation within the SMP for

Ian 2:49

I'm Big 2023 vibes.

Kevin 2:53

sure

Ian 2:53

Lee. Yeah, and you know, and it doesn't take a genius to pull up a chart of you know, pull up all four major indices S& P, NASDAQ, Russell, Dow, and you know, The proof is right there. Russell still sitting IWM. If you look at IWM still sitting at 203 where we were at Christmas.

Kevin 3:19

Mm hmm,

Ian 3:20

So, I mean, nothing I mean, barely, really even positive on the year. Maybe up, up. Percent or two.

Kevin 3:29

right.

Ian 3:30

Yeah, pretty, pretty tough. And Dow, which actually was, I mean, it hadn't really had some strength there earlier in the year. But, you know, with the, with the growth versus value relationship, flipping back to growth. Yeah, the

Kevin 3:50

Yeah, like like industrials and Generally, beginning of the year you know, like aerospace and defense is pretty strong, which is definitely helping out. You had like a lot of your industrial machinery names and things like that. You know, like kind of your areas of marine shipping that fall in there. I'm really, you know, as far as like relative participation is concerned, the only things kind of left there are aerospace and defense for the most part and that, you know, using something like PPA. Which is a little bit kind of more along the, you know, more in terms of, I guess, more equally weighted for aerospace and defense, just kind of hanging out,

Ian 4:26

Yeah, that's a good consolidation there.

Kevin 4:28

for sure. So, I mean, it's hanging in there, but you know, a lot of those industrial machinery names and

Ian 4:34

I mean, if you, if you spent the last month consolidating that, you've just gotten crushed on a relative basis. Even if it's a healthy consolidation.

Kevin 4:43

Mm hmm. For sure.

Ian 4:45

But yeah, it and our think we do have communication services are back above a relative 200 day.

Kevin 4:55

Yep.

Ian 4:56

So we do have two sectors again, comm services and tech. But,

Kevin 5:03

But even there, I mean, you're, You know, XLC, I guess, is somewhat just keepin pace with the S& P. And I mean, really, if you had to pick between the two, you're still, you know, probably just looking tech. Right? For

Ian 5:17

it's tech and and then you've had areas, you know, we had these little pops last week but we did see industrial, you know, industrials and materials, financials really had, you know, on a relative basis, had a pretty good week last week. Um, and then have given it all back

Kevin 5:40

Yeah, just couldn't hold it.

Ian 5:41

I mean, finance and you've got materials down to year to date, relative lows staples year to date, relative lows, which is, you know, fine. I don't think anyone's

Kevin 5:52

Right? Worried about that?

Ian 5:53

they can't get overweight staples.

Kevin 5:55

Mm hmm.

Ian 5:56

But yeah, again, you know industrials They're outperforming today, but just not really able to get anything going And that's you know, that's when industrials that look good They look good on an absolute basis kind of like ppa.

Kevin 6:13

But that's saying, I mean, if you're, you know, managing funds against any type of benchmark, you know, depending on what that is, I mean, you just, you're not staying in the game, you know, you're just going to dig in a hole

Ian 6:24

do

Kevin 6:25

or at least not getting ahead. Right.

Ian 6:27

Yeah,

Kevin 6:28

But I mean, yesterday, I

Ian 6:30

Go ahead.

Kevin 6:31

want to say yesterday I was taking kind of a, a dig through a lot of the, you know, like ETFs within a lot of like every sector, like more of your, I guess like industry thematic funds.

Ian 6:43

Mm hmm

Kevin 6:44

I mean, you know, kind of using like some of the relative filters that we have. There were no funds popping up, you know, like you talked about in staples, healthcare didn't have any. I met that criteria. Energy was zero real estate. Well, industrials only had three funds. I think financials maybe had around, you know, 10 funds out of that universe that kind of met that criteria. And really that was mostly. You know, like kind of blockchain, like FinTech related.

Ian 7:11

and techie stuff. Okay.

Kevin 7:13

So, I mean, it's pretty

Ian 7:15

think regionals they're at, you know, well, well, they're, you know, they're bouncing here a little bit on a relative basis, but pretty awful.

Kevin 7:25

even, you know, I think insurance, you know, kind of, for the most part is kind of slowed down a little bit too.

Ian 7:32

It has. It has

Kevin 7:34

Actually progressive has a really nice consolidation right now. Um,

Ian 7:39

in a few things in financials The major, major banks look fine

Kevin 7:45

Mm hmm.

Ian 7:46

and a lot of the investment kind of broker Schwab, Jeffries Oppenheimer Stifle they look okay, but yeah, yeah to your point. I mean even the insurance stuff is falling off

Kevin 8:03

Yeah. So really, I mean, it's what, a couple of weeks ago when I was on here, I mean, it's still kind of the same picture. I mean, you either have to be tilted towards the S& P or you really got to be more heavy into like, Tech or even just more specifically, I guess, right? Like kind of something semiconductors or your megacap tech,

Ian 8:21

What about the cryptos? Can we own cryptos?

Kevin 8:25

Not really the coins. I don't think necessarily.

Ian 8:28

Yeah, bitcoins lives in a relative 200 a

Kevin 8:32

No, Ethereum doesn't look much better. I think it's still kind of, you know, that environment where you know, maybe like your miners or like your kind of blockchain tech. Companies are, you know, leading the coins themselves. So I mean, if you're going to participate, you kind of got to be tilted to

Ian 8:48

I mean,

Kevin 8:49

of that industry.

Ian 8:50

you're like, that, I mean, Dapp is, it's been sideways for a couple weeks, but, you know. Open in Bitcoin, Bitcoin starts selling off, it's kinda had it's last trip up to 71, 000, so that was, early June. So essentially over the last, we'll call it three weeks, Bitcoin's gone from 71 to 60. And to your point, Kevin, Dapp which holds the crypto companies, right? So kind of like gold miners for gold. And that's, they're up 20 percent this month. Is that right? I mean, from June 5th, not about 10%, 11%, 20 percent at the highs, I guess. But that's certainly an, an interesting divergence. It's a pretty high beta area that you would normally, and if cryptos get hit, those things definitely get hit.

Kevin 9:48

hmm.

Ian 9:49

So yeah, that is,

Kevin 9:51

Yeah, but, you know, then again, like, even those miners really aren't necessarily keeping up with the S& P anymore, at least here on a, you know, short term basis.

Ian 10:00

you gotta go up, and you gotta go up every day,

Kevin 10:03

Right.

Ian 10:04

you just end up losing. So much relative ground.

Kevin 10:09

Next, like, WGMI, like, to the S& P, you know, kind of getting turned back here at relative resistance. So, I guess we'll see. Mm hmm.

Ian 10:18

We'll see. It continues to be that's where the momentum is at. It is in. Large cap growth and I think speaking of momentum, that's a great segue to highlight our biggest supporter of this podcast, which is the Adaptive Select ETF listed on the New York Stock Exchange under ticker ADPV. Helps investors access the two most prevalent factors in markets, momentum and relative strength through a proprietary identification method. The adaptive select ETF attempts to own the strongest 25 large cap stocks when the market is in an uptrend. And since not all market environments are the same, adaptive select also seeks to prevent extended declines by moving to short term treasury bills. And cash. During long-term market downtrend, investors can find out more including how to invest in A DPV by visiting adp v etf.com or calling 1-833-880-FIVE 2 0 0. Anything else you would like to leave our listeners with? Any crystal ball that says next week, we're going to have a different message other than large cap tech. Yeah.

Kevin 11:36

least now it's not really looking at it. Right.

Ian 11:39

Hey, you, yeah, you were on here two weeks ago and I mean, we might've been able to just copy and paste that podcast to this

Kevin 11:46

for sure. Right. For

Ian 11:48

up and under the surface, it's gotten worse. But hey, tis the hand we are dealt.

Kevin 11:55

And I think the only thing we talked about the last time I was on here is that maybe the end was going to find a floor, but it doesn't look like that happened either. So

Ian 12:05

That has not.

Kevin 12:06

JPY USD still sliding down the slope.

Ian 12:09

Yeah. I mean, that's gotta be one of the strongest downtrends out there from any Not just currencies, but any asset class. It's a tough one. And dollar, and dollar dollar index hanging out above 104. So, little bit of a divergence there. Dollar and rates spent most of the year moving in the same direction, very correlated. But over the last month we've seen the dollar rebound and rates have continued to slide off a little bit, up today. Bond's getting hit today,

Kevin 12:44

so bonds getting hit today. So

Ian 12:46

tough. Definitely still in a downtrend. Still a rising right environment.

Kevin 12:51

Yeah, your medals, minors, things like that really

Ian 12:54

yeah.

Kevin 12:54

of still sliding off. Really the only thing, I guess, really in that space kind of like your steel names, kind of interesting last couple days. Um,

Ian 13:04

Yeah, they've

Kevin 13:04

know, I guess more, yeah, more big pictures still. Not necessarily a great look, but you know, kind of over the really short term, kind of an interesting look there. So that might be one to watch, you know, RSI kind of turn it back around too. But,

Ian 13:19

now that you've put it on my radar.

Kevin 13:21

there you go. There it is. Put it on the watch list.

Ian 13:25

All right, sir, anything else?

Kevin 13:27

No, I mean, unless somebody knows how to get my lovely eight month old son to stop getting me sick all the time, that would be, that would be nice. Other than that, I got nothing.

Ian 13:36

the baby germs will get

Kevin 13:38

Mm hmm. Get me every time. I think I've been sick every month this year so far.

Ian 13:43

Mm hmm. I mean, it's kind of a rite of passage.

Kevin 13:47

I don't say you could just earn your stripes, basically.

Ian 13:49

yeah, I'm glad you're wearing that badge proudly.

Kevin 13:53

Somebody's got to do it.

Ian 13:55

Alrighty, well, have a great weekend, everyone.

Kevin 13:57

Yeah, for sure. Have a good one.