TOPLEY’S TOP 10 April 18 2024

1. Rates Back to Top of Mind….Some 10 Year Treasury Charts

Remember we broke above red trendline on this 10 year rate chart going back to 1985…A rally above 5% takes us back of 2006-07 levels.

2. The Breakout Above November 2023 is Number to Watch…10 Year Yield.

50day thru 200day to upside in 10 year yield…Not sure how significant of a signal when it comes to bonds.

3. Fund Managers Dumping Bonds

4. Risk-On Biotech Sector -17% from Highs.

XBI 200-Day back in play …trading above since Dec 2023

5. Stock Fund Manager Sentiment Max Bullish

From Dave Lutz at Jones Trading Reminder the BofA April fund manager survey sentiment is at the most bullish level since January 2022

6. The History of Small Cap vs. S&P.

Small Cap Structural Weakness-Nasdaq Dorsey Wright

Small caps have been laggards for the last decade when compared to large caps. Since 2014, the Russell 2000 Index (RUT) has only beaten the S&P 500 Index (SPX) in a calendar year twice, in 2016 and 2020. As it stands today, RUT is looking to mark its fourth consecutive year of underperformance against the SPX which would mean that RUT would have outperformed the SPX only once in the last eight years if this were to hold. It would be easy to say that large caps are simply more dominant and perform better than small caps if one looked back at the last few years. However, despite small caps’ struggles over the last decade, RUT has more often than not outperformed the SPX annually with data going back to 1979. RUT has outperformed SPX in just over half of all years (54.35%) since 1979. If one ignores the last decade, the percentage of years RUT outperformed SPX jumps up to 65.71%. The underperformance of RUT against the SPX is abnormal by historical standards but it’s also not without precedent. The chart below displays the excess return of RUT against the SPX for every year since 1979. A second data point is included, the 5-year average annual excess return, to help highlight longer periods of strength and weakness for small caps.

7. Another Below 50day Close…Europe Large Cap 50

8. TAN Solar ETF New Lows.

9. Coffee Breakout on Chart.

10. AI Models Improvement