Don’t Lose Sight of Improving Technical Backdrop into 2021 Array ( [cookie] => 7584e7-ae0e4f-6a2286-e059cf-305f08 [current_usage] => 2 [max_usage] => 2 [current_usage_crypto] => 2 [max_usage_crypto] => 2 [lock] => 1 [message] => [error] => [active_member] => 1 [subscriber] => 0 [role] => fsi_macro [visitor_id] => 591083 [reason] => [method] => ) 1
One of the biggest benefits of studying technical analysis, observing the change in prices across asset classes, is that it filters out the mainstream and social media noise we are all bombarded with. Investors are overwhelmed with election rhetoric, renewed COVID-19 concerns, stimulus talks that are on and off again every day not to mention the volatility of earnings reports. It’s no wonder equity markets have remained in choppy trading ranges since the beginning of September with many investors struggling for conviction in either direction.
I’m obviously biased as a technical analyst, but I am far more interested in what IS changing between and within markets and less concerned with someone’s explanation as to WHY they are changing. As one seasoned portfolio manager with over four decades of experience managing a large international portfolio regularly reminds me “Rob, your job is to identity what IS changing in markets and it’s the media’s job to try to weave together stories that try to explain WHY”. This is a particularly important point to remember at the momentum as the headline drama builds into another election. Why?
The first key technical point is to stay focused on the fact that the underlying market cycle, generally measured over a 3-4 years, is rarely disrupted by an election. By my analysis, the current 4-year markets cycle should carry markets higher through 2021 well into 2022 before we see evidence of a cycle peak. Secondly, despite the choppy trading that has developed since the beginning of September, there are a number of bullish internal leadership shifts developing. Growth stocks are pausing but are not breaking down while participation is broadening to a growing number of cyclical groups. I view this rotation to cyclicals as a healthy development for equity markets into and well through year-end. In addition, the behavior of other assets classes remains supportive of the rotation developing within equity markets with 10-year bond yields continuing to show evidence of bottoming.
Flowserve (FLS) - A contrarian cyclical recovery idea in the early stages of bottoming. I continue to encourage investors to ignore the headline noise and choppy trading for the coming weeks and to remain positioned in the direction of the improving longer-term cycle. Specifically, use near-term pullbacks to continue broadening portfolio exposure to include more cyclicals as part of a bar-bell portfolio that already includes core positions in many of the leading growth stocks. Fundstrat’s Tom Lee and Ken Xuan publish six thematic portfolios one of which is a PMI Recovery basket. I would encourage investors looking for a list of stocks that should be beneficiaries of an improving economy to review this list. For contrarian investors, I’m highlighting FLS as a laggard within that list that in the very early stages of bottoming as it begins to rally above its 200-dma and reversing its 2020 relative performance downtrend.
Become a Member To Access FS Insight Research
FS Insight gives individual investors access to Tom Lee's research, previously only available to banks and hedge funds.
What's included in your FSI Membership?
Thomas J. Lee
Head of Research
Type | Publication | Mon | Tue | Wed | Thu | Fri | Monthly | |
---|---|---|---|---|---|---|---|---|
Reports |
First Word The best market research out there -- on a near-daily basis. |
|||||||
Intraday Alerts These are released periodically after crucial market developments. |
Real-Time | |||||||
Weekly Roadmap Weekly summary of market events and updates on our key theses. |
||||||||
Webinars & Videos |
Macro Minute Video Daily video commentary on market conditions & key events. |
|||||||
Outlook Webinars We host over 12 LIVE webinars per year with our research team and high-profile special guests. Incredible value and market insights! |
Yearly | |||||||
Granny Shots Webinars | ||||||||
CEO Interview Webinars | Quarterly | |||||||
Appearances Archive | Real-Time | |||||||
Allocation Tools |
"Super Granny" Shots Stock List Granny Shots we expect to tactically outperform and underperform. |
|||||||
Granny Shots Stock List Thematic investment stock picks that aim to outperform the S&P 500. |
||||||||
Sector Allocation A sector allocation strategy that is designed to outperform the S&P 500 while taking minimal risk. |
||||||||
Market Alerts |
⚡️FlashInsights Real-time market commentary about macro and crypto events from our research heads. |
Real-Time |
Mark L. Newton
Head of Technical Strategy
Type | Publication | Mon | Tue | Wed | Thu | Fri | Monthly | |
---|---|---|---|---|---|---|---|---|
Reports |
Daily Technical Strategy Daily commentary on market trends and short term opportunities. |
|||||||
Weekly Roadmap Weekly summary of market events and updates on our key theses. |
||||||||
Webinars & Videos |
Daily Technical Strategy Daily commentary on market trends and short term opportunities. |
|||||||
Live Technical Analysis | ||||||||
Outlook Webinars We host over 12 LIVE webinars per year with our research team and high-profile special guests. Incredible value and market insights! |
Yearly | |||||||
Appearances Archive | Real-Time | |||||||
Allocation Tools |
Newton's Upticks Stock List Technically derived, intermediate-term picks of attractive risk/reward opportunities from the S&P 500. |
|||||||
Market Alerts |
⚡️FlashInsights Real-time market commentary about macro and crypto events from our research heads. |
L. Thomas Block
Washington Policy Strategy
Type | Publication | Mon | Tue | Wed | Thu | Fri | Monthly | |
---|---|---|---|---|---|---|---|---|
Reports |
US Policy Weekly update on developments in Washington DC and how they may impact Wall Street. |
|||||||
Weekly Roadmap Weekly summary of market events and updates on our key theses. |
||||||||
Market Alerts |
⚡️FlashInsights Real-time market commentary about macro and crypto events from our research heads. |
Real-Time |
Sean Farrell & Crypto Team
Type | Publication | Mon | Tue | Wed | Thu | Fri | Monthly | |
---|---|---|---|---|---|---|---|---|
Reports |
Market Update Stay on top of the crypto markets with macro commentary, technical analysis, and the most relevant news. |
|||||||
Weekly Strategy Weekly summary of market events and updates on our key theses. |
||||||||
Funding Fridays Are you looking for investment opportunities in the crypto space? We explore early-stage crypto opportunities in this note about where the smart money is being invested! |
||||||||
Crypto Concepts We periodically provide in-depth research on the leading protocols, companies, and funds shaping the crypto ecosystem. |
||||||||
Liquid Ventures A recurring research note focused on delivering unique insights into high-risk investment opportunities within the crypto ecosystem, primarily centered on early-stage or small-cap tokens. |
||||||||
Deep Research We periodically provide in-depth research on the leading protocols, companies, and funds shaping the crypto ecosystem. |
Quarterly | |||||||
Weekly Roadmap Weekly summary of market events and updates on our key theses. |
||||||||
Webinars & Videos |
Outlook Webinars Ongoing webinars exploring crypto opportunities, in depth research, and exclusive research offerings from our team of analysts and leading cryptocurrency firms. |
Yearly | ||||||
Crypto Comments |
Daily Technical Strategy From Bitcoin, Ethereum and Solana to other coins, our Head of Technical Strategy highlights important price movement to help give you an edge. |
|||||||
Allocation Tools |
Crypto Core Strategy A powerful tool designed to help crypto investors build a crypto portfolio that outperforms the industry’s king – bitcoin – regardless of market conditions. |
|||||||
Market Alerts |
⚡️FlashInsights Real-time market commentary about macro and crypto events from our research heads. |
Real-Time |
FS Insight Research Team
Type | Publication | Mon | Tue | Wed | Thu | Fri | Monthly | |
---|---|---|---|---|---|---|---|---|
Reports | First to Market | |||||||
*Earnings Daily This note provides investors with a myriad of useful metrics to measure the progress of earnings season |
||||||||
Signal From Noise Highlights timely market themes and sectors with corresponding stocks, cutting through the day-to-day market “noise” for a distinct perspective. |
||||||||
Community Questions We gather your inquiries and answer them in the most scalable way. Hear directly from our research principals! |
||||||||
FS Insight Academy Our main goal is to make you a better investor! This series will guide you through key financial concepts and topics in an understandable way. |
||||||||
Webinars & Videos |
Free Macro Webinars Live webinars and Q&A with our research team and high-profile industry leaders. |
Quarterly | ||||||
Free Crypto Webinars Live webinars and Q&A with our research team and high-profile industry leaders. |
Quarterly |
*Daily reporting during each quarterly earnings season.