Sometimes—very rarely, but sometimes—I think it would be fun to be one of the macro pundits. You’ve all read their work: long weekly missives trying to connect the dots across global asset markets, searching for correlations no one else sees.
Do movements in the Turkish Lira provide a “tell” for Bitcoin? What does the breakdown in the correlation between Wingstop Inc. (WING) and the VanEck Semiconductor ETF (SMH) mean for the broader stock market?
This isn’t a joke—I saw that last one recently and laughed so hard I might have pulled a muscle. When I was done laughing, I came back to one of our core values—the title of today’s note: Keep it Simple & Straightforward.
So, while this might not be the most profound statement on earth, it fits:
Major asset classes are trading at record highs. Record highs are not bearish.
S&P 500
The main index closed higher for a third consecutive week, is trading at record levels, and remains well above the rising 60-week moving average.
Source: Optuma
NASDAQ 100 Index
The NASDAQ 100 Index also closed higher for a third consecutive week, is trading at record levels, and sits above the 10-week moving average, which itself is above the 40-week moving average.
Source: Optuma
The Russell 2000
The iShares Russell 2000 ETF (IWM) closed higher for a sixth consecutive week. Holding above the $230 level would signal that small caps have completed a nearly four-year consolidation.
Source: Optuma
Junk Bonds
The SPDR Bloomberg HY Bond Fund (JNK) is trading at record highs, above a steadily rising 40-day moving average. The fund is on a seven-week winning streak.
Source: Optuma
Final Thoughts
Sometimes, the best form of analysis is the simplest one—K.I.S.S.
Dan Russo, CMT
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