Dorsey Wright's Podcast 1036 - Charts of the Week: Asset Class Rankings, Market Drawdowns, Copper vs Gold, PTNYSE, and RS Spread.

·24 min·2 clips

Dorsey Wright analysts preview their April 7th quarterly webinar on market evidence and asset rankings.

The episode begins with hosts Miles and Joseph introducing the podcast for the week of March 27th. They mention a quarterly webinar scheduled for April 7th featuring Senior Portfolio Manager John Lewis and Head of Investment Intelligence Yanni. The discussion focuses on market movements over the past week, noting mostly negative performance across many sectors except for some indices like the Russell 2000 and Dow. The hosts delve into the Dorsey Wright asset class rankings, explaining how commodities recently moved from third to first and back to third due to energy-driven gains followed by precious metals weakness. They highlight the importance of having a disciplined process to avoid whipsaw trades. The conversation shifts to market drawdowns, with Joseph noting that a 5-10% pullback is normal and occurs about once a year, with historical data showing recovery typically within 2.3 months. They discuss market participation indicators, specifically the percent of NYSE stocks in positive trends dropping below 50%, signaling underlying weakness. The hosts analyze the copper-gold ratio, explaining it as a risk-on/risk-off indicator and noting copper's recent relative strength against gold despite absolute weakness. They explore the concept of positive relative strength, which can mean going up more or down less than a benchmark. The episode concludes with a discussion on the RS spread, which measures dispersion between winners and losers, and how momentum strategies have performed recently. The hosts promote the upcoming webinar again before signing off.

As heard by us

A 48 percent NYSE breadth reading meets momentum that has reversed back up to highs.

Market weakness is framed here as a question of what is happening below the index level in a chart-led look at the final week of Q1. The hosts move from a broadly negative one-week roll into a clearer read on participation, with the NYSE percent-positive trend below 50 percent…

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Why you'd press play

You want to weigh the last week of Q1 against thinning participation, a 48 percent NYSE positive-trend reading, and momentum that is still holding up.

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