Penned by CAPIS Staff

What assets are market drivers? What factors are outperforming? What correlations should be watched? With all that is happening in global markets during a year-long pandemic, guiding hands that can cut through the noise are beneficial, if not essential, context providers.

Shortly prior to the Thanksgiving holiday, CAPIS hosted the second of its new research call series which featured Katie Stockton, founder and managing partner of Fairlead Strategies, who provided such a viewpoint, ensuring asset owners and managers don’t miss the forest for the trees. The following are some of the high-level takeaways from Stockton’s presentation:

A Momentum Game

As the market saying goes, “The trend is your friend.” And right now the trend remains bullish according to Stockton. While the market might benefit from a period of consolidation — a brief breather before resuming a bullish charge — and will exhibit some chop, the up-and-to-the-right dynamic remains entrenched.

Tech Gets Friends

As has been well documented, tech and consumer discretionary sectors have been contributing the majority of the horsepower driving this post-March rally. That will likely not be the case as we move along — other sectors will contribute as well (e.g. the recent performance of financials).

Almighty Dollar

Stockton’s perspective on emerging markets aligns with many’s: a continued weak dollar is helpful. Now, too far too fast is not an ideal situation either so keep your eyes peeled to how the dollar index (DXY) handles the low 90s (it’s getting close to crossing into the 80s at the time of this writing).

Indicator Consistency

While Stockton’s arsenal of favored indicators is vast, the key in her mind is consistency. Stick to the same array of indicators so you can become intimately familiar with their characteristics and the value they add to your trading/investing.

CAPIS’s first research call was before the U.S. Presidential election and featured DataTrek Research’s Nick Colas —  to read a recap of that call, go here. Providing research calls such as these moving forward, hosting webinars, and writing more blogs are all focuses of CAPIS moving into the new year as we take on a more active voice in the industry.

To find out more about future calls, ask questions, or to learn about CAPIS, please reach out to [email protected] and follow us on Twitter (@capisinc) and LinkedIn for additional updates and insight from our team.