GTI Energy (GTR:AU) has announced Scoping Study Fieldwork Testing Complete
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Blackstone Minerals (BSX:AU) has announced Visible Gold Discovered Above High Grade Cu-Au Porphyry
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More than anything else, rapid urbanization is driving demand for critical minerals like copper around the world.
Delivering the opening keynote address at this year’s Prospectors and Developers Association Conference (PDAC) in Toronto, Ontario, Canada, BHP (ASX:BHP,NYSE:BHP,LSE:BHP) CEO Mike Henry spoke to the opportunities and challenges posed by the growth of urban centers around the world.
His presentation discussed how the mining industry, including Canada’s, can respond to the growing demands on the resource sector and deliver the critical minerals that will be required over the next few decades.
The opportunity: Copper and critical mineral demand outpacing supply
Over the last 10 years, there has been a global population redistribution. For the first time, more of the world’s population lives in urban centers than in rural areas. Along with this shift has come greater densification, which has pushed electrical grids to their limits.
However, as Henry pointed out, this is just the beginning. By 2050, the global population will grow by 25 percent to 10 billion people, and the vast majority of them will live in urban centers.
“They are the engines of massive opportunity for our industry. More high rises, homes, roads and infrastructure, greater electrification, more phones, televisions, cars and air conditioning. More energy, more data centers to power AI and cloud computing,” he said.
This population boom means the world will need more of everything, from copper and steel to potash and other minerals.
As a company, BHP is a global powerhouse. Its portfolio of assets touches on a variety of minerals that will be critical in the coming decades; few, however, may be as important as copper. Henry suggests that demand for red metal will rise 70 percent over the next 15 years.
The massive surge in demand presents an enormous opportunity for the resource sector, especially for investors. Outlining the scale of capital required, Henry estimates that more than US$250 billion will be needed for mining and concentration to keep pace with demand growth, with additional funding needed for smelting and refining — and that’s just for copper.
When other minerals are added to the equation, the total could reach US$800 billion between now and 2040.
The first challenge: Finding significant critical mineral deposits in Canada
Although opportunities exist, they don’t come without challenges, and Henry suggests that the challenges exist both above and below ground.
“First, we’re going to have to find the resources… Those resources are big, large deposits that are becoming harder to find,’ he said. ‘They’re deeper, they’re more remote, they come with new technical challenges, and they’re often in riskier jurisdictions.’
This has led to BHP rethinking how it invests in exploration, seeing them not only fund and carry out exploration work itself, but partnering with other companies around the world.
Some of these partnerships have seen work being carried out in Canada with Henry suggesting considerable untapped resources in the country.
“Of course, Canada has extensive exploration history already, yet much of this has been at shallow depths in subaortic areas. So there remains potential to find deeper or underexplored parts of the country, and we’re engaged in that effort with a specific focus on copper,” he said.
The solution, he said, is to apply new technologies from other sectors, including 3D seismic sensors and muon tomography. However, this new technology generates huge amounts of data, which benefits from advances in artificial intelligence to help make sense of all the information being collected.
Henry says that BHP has taken a different approach to partnerships by borrowing from the tech sector.
“We’ve also borrowed the accelerator concept from big tech, and we are supporting innovative exploration technologies, methods, and ideas through our global accelerator program, BHP Explorer,” Henry said.
The implications are enormous for an industry that needs new ideas brought to the forefront in short timelines.
The second challenge: Government mining policies
However, the biggest challenge facing the resource sector comes not from within the industry but from outside it.
Henry suggested that the biggest changes can come from evolving government policy, and he thinks things are beginning to move in the right direction. Canada itself released a critical minerals strategy in 2021, and its latest update includes 34 minerals and metals.
“There has been a very welcome burst of renewed government interest in critical minerals in recent times, and the motivations do vary,” he said.
For some governments, this interest stems from a desire to use resources to unlock the economic opportunity associated with decarbonizing the global energy grid. Meanwhile, other governments are pursuing critical minerals needed to provide energy security, economic sovereignty and defense supply chain resilience.
Henry noted that some countries are taking steps to make themselves more competitive and are working to attract capital investment for projects through fiscal reform and tax credits. He also pointed out that some governments are streamlining the regulatory process, which he suggests will speed up development time and reduce risks.
Henry sees incredible benefits in Canada due to the strength of the mining sector, but he cautions that past successes aren’t indicative of future success. He believes Canada is in danger of missing out on the next great opportunities in the resource sector.
“Other countries have some mix of even better resource endowments in certain commodities, better tax and royalty regimes, more streamlined permitting processes, while still maintaining high standards and more productivity, enabling industrial relations framework,” Henry said.
Henry sees complacency and bureaucracy as the enemy of growth and economic security, and believes Canada needs to accelerate its efforts to match those being carried out elsewhere.
In comparison, he points to Chile, where he says they’ve accelerated permitting for multi-billion dollar greenfield projects to five to 10 years and even shorter for brownfield developments. In Canada, he said, those timelines stretch to 10 to 15 years.
“Global capital is going to flow to the best opportunities, risk return opportunities globally. So if a country isn’t constantly benchmarking and saying, what’s the combined effect of our industrial relations policies, our tax settings, our permitting process relative to the other countries that are chasing the same opportunity, we run the risk of falling behind,” Henry said.
What does this mean for investors?
Henry outlined a potential for staggering growth in the mining sector for critical minerals such as copper over the next 15 to 20 years. He suggested there is an opportunity for investors looking to get into the sector at all levels, from exploration to production.
He also noted that it is not without problems. When investors evaluate projects, especially early in development, they should recognize that a multitude of factors could determine their success or failure.
Henry touched on access to the resource, the depth of the deposit and its remoteness. He also noted that jurisdictions play a huge part in a project’s success, so investors should research a country’s permitting process and tax system, as well as why a country may look to fast-track projects and whether it affects a company’s risk analysis.
“Once capital mobilizes in one direction, sometimes it can be quite hard to mobilize back in the other,” Henry said.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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Fear is gripping the financial markets in 2025. CNN’s Fear and Greed Index, a widely followed gauge of investor sentiment, has plunged into the ‘Extreme Fear’ zone.
After dipping to 22 at the end of February, the index had fallen to 20 as of March 4, reflecting deep unease among traders and institutional investors alike.
This shift comes amid a mix of economic uncertainties and global geopolitical tensions that have left investors skittish. This includes the US Trump administration enacting tariffs on allies Canada and Mexico on March 4, as well as the administration pulling away from Ukraine and towards Russia.
While market sentiment indicators don’t dictate future price movements, they provide insight into the emotional state of the market — often a contrarian signal for savvy investors. When fear reaches extreme levels, it has historically marked moments of potential opportunity or further market turbulence.
But what does this drop into Extreme Fear really mean? How is the index calculated? And how have past instances of such extreme sentiment played out in the markets?
This article explores the significance of the CNN Fear and Greed Index, its historical context and what investors should watch for next.
What is CNN’s Fear and Greed Index?
CNN’s Fear and Greed Index is a tool designed to measure the prevailing emotions influencing the stock market by weighing seven key indicators.
The Fear and Greed Index operates on a scale from 0 to 100, with a score under 45 indicating fear, a score of 55 and above signifying greed, and one in between marked as neutral. Scores of under 25 and above 75 are labeled Extreme Fear and Extreme Greed, respectively.
How is CNN’s Fear and Greed Index calculated?
The index aggregates seven key indicators, each reflecting different aspects of market sentiment:
- Stock Price Strength – Tracks the number of stocks hitting 52-week highs versus those reaching 52-week lows.
- Stock Price Breadth – Examines trading volume in advancing versus declining stocks.
- Put and Call Options – Analyzes the ratio of bearish (put) options to bullish (call) options.
- Junk Bond Demand – Measures the yield spread between high-yield (junk) bonds and safer investment-grade bonds.
- Safe Haven Demand – Assesses the relative performance of stocks versus government bonds.
When these indicators collectively signal heightened caution, the Fear and Greed Index falls into the fear zone, with Extreme Fear indicating widespread pessimism in the markets.
Other instances of Extreme Fear
Understanding past instances of Extreme Fear can provide insights into current market conditions. The last two notable times the index hit Extreme Fear were August 5, 2024, and December 19, 2024.
1. August 5, 2024: Global sell-off and economic uncertainty
On August 5, 2024, markets saw a sharp decline following weak tech earnings and US employment data, accelerated by an unexpected interest rate hike by the Bank of Japan resulting in investors trying to unwind their yen carry trades. This caused a ripple effect across global markets:
- Japan’s Nikkei index plummeted 12 percent in a single session.
- The International Monetary Fund (IMF) warned that the volatility could be a precursor to prolonged instability.
2. December 19, 2024: Federal Reserve’s hawkish stance
Investor fears resurfaced in mid-December when the US Federal Reserve signaled that interest rates would likely remain elevated longer than expected. The announcement sent shockwaves through the markets:
- The US dollar surged to a two-year high, weighing heavily on emerging markets.
- Cryptocurrencies took a hit, with Bitcoin dropping over 15 percent in a week.
How do other fear-based indices compare?
While CNN’s Fear and Greed Index is a popular barometer of market sentiment, it isn’t the only fear-based indicator worth watching. Here’s how other major sentiment gauges compare:
Crypto Fear & Greed Index
The Crypto Fear & Greed Index tracks investor sentiment in the cryptocurrency market. Crypto markets are particularly sensitive to risk-off sentiment, making this index an important measure for digital asset investors.
The Crypto Fear & Greed Index has also dropped into Extreme Fear with a score of 15 on March 4. This decline coincided with continued geopolitical tensions, particularly US President Donald Trump’s announcement of new 25 percent tariffs on Canada and Mexico that day.
Doomsday Clock
Though not a financial index, the Doomsday Clock, updated annually by the Bulletin of Atomic Scientists, reflects global existential risks, including nuclear tensions, climate change and geopolitical instability.
As of January 28, 2025, the clock is at 89 seconds to midnight, signaling heightened global uncertainty, which can influence investor sentiment in risk assets like equities and cryptocurrencies.
What Extreme Fear means for investors
The plunge of CNN’s Fear and Greed Index into Extreme Fear territory signals widespread investor anxiety. But is this a warning of further declines, or a contrarian buy signal?
Historically, moments of extreme fear have often preceded strong market rebounds, as panicked selling creates opportunities for value investors. However, not all instances lead to immediate recoveries — some mark the beginning of prolonged downturns.
Key considerations for investors:
- Economic data: Keep an eye on employment reports, inflation data and GDP growth figures.
- Federal Reserve policy: Interest rate decisions will continue to be a key driver of market sentiment.
- Corporate earnings: Weak earnings reports could exacerbate investor fears, while strong results may signal resilience.
- Geopolitical developments: Trade tensions, global conflicts and macroeconomic policies can shift market sentiment quickly.
While fear-based indicators provide valuable insights, investors should use them alongside fundamental and technical analysis to make informed decisions.
Whether this moment marks a temporary panic or the start of a broader downturn remains to be seen, but one thing is clear: investors should be prepared for volatility in the weeks or months ahead.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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US President Donald Trump’s tariffs on Canada and Mexico could severely impact the economies of both countries, potentially slowing down production of certain goods, raising prices on products and sparking fears of a recession, analysts warn.
The US on Tuesday imposed 25% tariffs on imports from both of its neighbors, as well as a 10% tax on Canadian energy.
Though both countries have also warned they will impose reciprocal tariffs that will affect the US economy, Canada and Mexico stand to lose far more because they depend so heavily on America for trade. The US is considered their largest export market.
Last year, Mexico exported roughly $505 billion to the US, roughly 30% of its GDP, while Canada exported over $412 billion, about 20% of its GDP. Meanwhile, US exports to Canada were valued at $349 billion last year – but this represents just over 1% of US GDP. Similarly, it exported roughly $334 billion in goods to Mexico, also only around 1% of its GDP.
Impact on Canada
Canada’s car manufacturing and energy sectors will be among the most affected, said Drew Fagan, a professor at the University of Toronto’s Munk School of Global Affairs and Public Policy.
According to the US Census Bureau, about $185 billion worth of goods in those sectors are imported into the United States from Canada.
Producers could then decide to pass those costs on to consumers, which could lead to inflation, he warned.
“If it’s a 25% tariff, that’s far bigger than profit. So, at a certain point, very quickly, unless you can pass those costs along to consumers, ultimately, it’s not profitable to continue to produce,” he said, warning that a pause in production could also lead to a loss of jobs.
Canada is also considered the single largest supplier of energy to the US. In 2023, it provided approximately 60% of crude oil imports to the US, 85% of electricity imports and 99% of natural gas imports, according to the Canadian government. The value of all three is roughly $100 billion, according to the US Census Bureau, with crude oil accounting for the vast majority of that sum.
If tariffs were to disrupt the energy supply chain, Canada would feel the impact more than the US given that its primary customer is the United States, while the US has more options to choose from.
Canadian Prime Minister Justin Trudeau acknowledged that the trade war would hurt Canadian workers, saying, “This is going to be tough.” Speaking at a press conference Tuesday, he pledged government support for businesses to try to soften the impact.
Impact on Mexico
Like Canada, Mexico’s car manufacturing industry is deeply intertwined with the United States and heavily dependent on American consumers.
The US imported $87 billion worth of motor vehicles and $64 billion worth of vehicle parts from Mexico last year, excluding December, according to the Department of Commerce.
Tariffs would make these products more expensive for US consumers – so much so that Americans could stop buying from Mexico, and that could subsequently affect the Mexican economy, said Jason Marczak, Vice President and Senior Director of the Atlantic Council’s Adrienne Arsht Latin America Center.
Mexican President Claudia Sheinbaum said Tuesday morning that her country would try to seek investments from other nations. “If this issue of tariffs is consolidated, an important evaluation of the geographic diversification of the Mexican economy must be made,” she said.
Marczak said Mexico’s economy is so dependent on the US that it’s hard to find alternative trading partners.
Although Mexico recently reached an agreement with the European Union to diversify its commercial relationships, Marczak said Mexico and the US are still bound by their free trade agreements, making it difficult for Mexico to avoid negative impacts from US tariffs.
How Mexico and Canada could respond
Trudeau said Tuesday that Canada will retaliate with levies of its own. It plans to impose 25% tariffs on C$155 billion worth of US goods over the next month, with C$30 billion coming into effect immediately.
Sheinbaum said her country would also respond with retaliatory tariffs and other non-tariff measures, which she is set to announce on Sunday. She did not provide details.
However, those retaliatory measures will have further negative consequences on all three economies, Marczak pointed out.
Moving forward, both countries will have to consider whether they can stomach these impacts or adjust to meet the demands of Trump.
Trudeau said Tuesday his country would work with Mexico to find new ways to deal with the tariffs.
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Two suicide bombings breached a wall at a military base in northwestern Pakistan before other attackers stormed the compound and were repelled in violence that killed at least 12 people and wounded 30 others, according to officials and a local hospital.
A group affiliated with the Pakistani Taliban claimed responsibility for the attack in Bannu, in Khyber Pakhtunkhwa province, and said that dozens of members of Pakistani security forces were killed. The military didn’t immediately confirm any casualties, but Bannu District Hospital said that at least a dozen people were dead.
The two suicide bombers blew themselves up near the wall of the sprawling military area, a security official said on condition of anonymity, because he wasn’t authorized to speak with reporters.
“After a breach in the wall, five to six more attackers attempted to enter the cantonment, but were eliminated,” the security official said.
The attack happened after sunset, when people would have been breaking their fast during the Muslim holy month of Ramadan.
Jaish Al-Fursan claimed responsibility for the attack, the third militant assault in Pakistan since Ramadan started Sunday. In a statement, the group said the source of the blasts were explosive-laden vehicles.
Plumes of gray smoke rose into the air and gunshots continued after the two explosions, police officer Zahid Khan said. Four of those killed were children, hospital officials said. The victims lived close to the scene of the blasts.
A spokesman for Bannu District Hospital, Muhammad Noman, said that the evening blasts badly damaged homes and other buildings.
“The roofs and walls collapsed and that’s why we are receiving casualties,” he said.
Hospital director Dr. Ahmed Faraz Khan said: “So far we have received 42 victims, 12 dead and 30 injured. A few of them are critical, but most are stable. All doctors, particularly surgeons and paramedical staff, have been called for duty as a medical emergency has been imposed.”
The blasts caused the roof of a nearby mosque to collapse while a number of worshippers were inside, rescue workers and provincial government spokesman Muhammad Ali Saif said.
Rescue workers trying to free people from underneath the rubble said that they had retrieved the body of the mosque’s imam.
Pakistani Prime Minister Shehbaz Sharif condemned the attack and expressed his grief over the loss of life. The chief minister of Khyber Pakhtunkhwa, Ali Amin Gandapur, ordered an inquiry.
Militants have targeted Bannu several times. Last November, a suicide car bomb killed 12 troops and wounded several others at a security post.
In July, a suicide bomber detonated his explosives-laden vehicle and other militants opened fire near the outer wall of the military facility.
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A German tattoo artist who tried to enter the United States from Mexico through the San Diego border has been in Immigration and Customs Enforcement (ICE) detention for over a month, according to a friend who witnessed her being detained.
Jessica Brösche, a Berlin-based tattoo artist, had been vacationing in Mexico when she decided to travel to the US from Tijuana with an American friend, Nikita Lofving. But at the San Ysidro port of entry immigration authorities took Brösche into custody.
The call was on January 25. Brösche has been in detention ever since, half a month past when she originally hoped to leave the US on February 15, Lofving says.
In a statement to KGTV, an ICE spokesperson wrote that Brösche is in detention due “to the violation of the terms and conditions of her admission.”
“I mean, she was coming to work, but not really for money,” Lofving said. “We have an agreement between artists. She’s one of my best friends. We’ve been working on this tattoo project on my body for the last five or six years, and in exchange, I make clothes for her.”
In a phone interview with KGTV last month, Brösche said that she had been kept in “horrible” solitary confinement for eight days when she entered US custody.
“I just want to get home, you know? I’m really desperate,” Brösche told KGTV from Otay Mesa. “I don’t really understand why it’s taking so long to get back to Germany.”
Lofving said that Brösche’s friends and family are hoping that she’ll be out of detention and on a flight back to Germany on March 11, and that her mother bought her a plane ticket home. They aren’t sure whether ICE will let her out by then, however.
“We sent (Brösche) back the information for the tickets, and she told her ICE agent,” Lofving continued, saying the ICE agent had said, “No, you have to get the ticket approved before you buy it.”
‘Extremely concerning’
“Our responsibility is to care for each person respectfully and humanely while they receive the legal due process that they are entitled to,” said spokesperson Ryan Gustin.
By entering on the waiver program, a tourist waives their right to any kind of litigation, Joseph explained.
But normally, a tourist denied entry to the US would be allowed to withdraw their application for admission. “Instead of being subjected to deportation proceedings, they’re allowed to kind of get back on the airplane and turn around and go home, and that does not appear to have happened in this case,” Joseph continued.
In any case, Joseph said that Brösche’s extended stay in Otay Mesa is “extremely concerning.”
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Millions of residents along Australia’s eastern coast are preparing for the impact of the most southerly cyclone to threaten the region in more than five decades.
Tropical Cyclone Alfred, with strength the equivalent of a category 1 Atlantic hurricane, is expected to cross the coast just south of the Queensland capital of Brisbane, home to 2.5 million people, in the early hours of Friday, potentially at high tide, complicating the days ahead for emergency services.
“This is a rare event – to have a tropical cyclone in an area that is not classified as part of the tropics, here in southeast Queensland and northern New South Wales (NSW),” said Prime Minister Anthony Albanese in Brisbane on Wednesday.
The last cyclone to cross near Brisbane of a similar strength was Cyclone Zoe back in 1974, which caused major flooding in the city and NSW’s Northern Rivers region.
Brisbane’s population has more than doubled since then, but experts say the worst of Cyclone Alfred could be felt south of the storm’s eye, along popular tourist beaches from the Gold Coast to northern NSW.
“We haven’t seen anything quite like this for a good 50 years,” said Darrell Strauss, coastal management researcher at Griffith University.
“There are areas where storm surge is the biggest problem, and then there’s areas where high waves and coastal erosion and inundation from the sea directly due to the waves are a big problem. So, we’ve got a combination of all of that from Brisbane to the Northern Rivers (of NSW),” Strauss said.
As of Wednesday, Cyclone Alfred was just over 400 kilometers (250 miles) off the coast, moving west with destructive winds of up to 120 kilometers per hour (75 miles per hour), according to Australia’s Bureau of Meteorology (BOM).
Creeks and rivers in northern NSW were expected to flood, threatening an unwelcome return to scenes of 2022 when heavy rain saw several rivers burst their banks.
Three years on, some flooded homes are still uninhabitable and delays in rebuilding forced residents to live in temporary housing and tents for far longer than many hoped.
“The Northern Rivers has gone through hell over the last few years. We’re particularly concerned about some of those communities,” NSW Premier Chris Minns said Tuesday.
In Brisbane, residents were busy sandbagging their homes and stripping supermarket shelves of food and bottled water as authorities issued warnings about potential flooding.
Modeling showed 20,000 properties across Brisbane could be impacted by storm surge or flash flooding, according to the Lord Mayor’s office.
Beaches in northern NSW and along the Queensland coast were closed, as authorities warned of hazardous surf with waves of more than 5 meters (16 feet). Storm surges could go even higher, up to 10 meters (32 feet), according to the NSW State Emergency Services.
Queensland Premier David Crisafulli urged residents near vulnerable coastal areas to follow evacuation orders.
“If it was the case that this system, which has strengthened, was to cross on high tide in the middle of the night, and you’re in that storm surge, the last place you want to be is in your home. So, now’s the time,” he said.
Major sporting events were canceled, and schools will close in the affected areas Thursday and Friday.
Strong winds were also a concern in areas where residents are accustomed to heavy rain, but not necessarily cyclone-strength gales. They were urged to tie down anything that could take flight.
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Americans applied for British citizenship in record numbers last year, with a historically high volume of applications submitted in the last quarter of 2024 – a period coinciding with US President Donald Trump’s re-election.
More than 6,100 US citizens applied for UK citizenship last year, the most since records began in 2004, when fewer than 3,000 Americans submitted an application, according to data from the UK’s Home Office.
Last year’s numbers also saw a marked uptick from 2023, a year with fewer than 5,000 applications by US citizens.
Applications by Americans soared in the last three months of 2024, when more than 1,700 people applied – the most in any quarter in the past two decades.
The surge is reminiscent of an upswing recorded in the first six months of 2020, when more than 5,800 Americans gave up their citizenship, nearly tripling the number from all of 2019.
That uptick came in the wake of Trump’s first presidency and changes in tax policy, analysts argued then, and were mostly Americans who had already been living in Britain for some time.
Trump himself could apply for British citizenship, through his late mother, Mary Anne MacLeod, who was born and raised in Scotland before leaving as a 17-year-old for the United States to work as a domestic servant in 1930.
European escape
As more Americans scramble for UK passports, some British citizens have recently sought their own backups.
In the years following the UK’s vote to leave the European Union (EU) in 2016, the number of Britons applying for Irish passports – giving them the right to freely work, live and travel across Europe – almost doubled.
And with Trump’s re-election in November last year leaving Americans around the world worried about what the next four years may bring, some communities have sniffed an opportunity.
An Italian village launched a website aimed at would-be American expats, offering up more cheap homes in the hope that those upset by the election’s outcome will rush to snap up one of its empty properties – and revive its fortunes after decades of depopulation.
“Are you worned (sic) out by global politics? Looking to embrace a more balanced lifestyle while securing new opportunities?” the website asks. “It’s time to start building your European escape in the stunning paradise of Sardinia.”
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Sector Rotation: Financials Climb as Consumer Discretionary Slips
While the players in the top five sectors have remained the same, we can see some movement in their relative positions. Communication services continue to lead the pack, but financials have climbed to second, nudging consumer discretionary down to third. Technology and utilities are holding steady at fourth and fifth, respectively.
In the bottom half of the ranking, consumer staples has overtaken industrials, claiming sixth place. The remaining positions, from eight to eleven, have stayed the same.
- (1) Communication Services – (XLC)
- (3) Financials – (XLF)*
- (2) Consumer Discretionary – (XLY)*
- (4) Technology – (XLK)
- (5) Utilities – (XLU)
- (7) Consumer Staples – (XLP)*
- (6) Industrials – (XLI)*
- (8) Energy – (XLR)
- (9) Real-Estate – (XLRE)
- (10) Healthcare – (XLV)
- (11) Materials – (XLB)
Weekly RRG
This week’s observations on weekly sector rotation:
- Communication services remain the lone wolf in the leading quadrant, with its recent node pointing back up — a positive sign for its continued dominance.
- Financials are on the cusp of re-entering the leading quadrant, showing an apparent turnaround.
- Consumer discretionary (XLY) is in the weakening quadrant but still has the highest RS-Ratio reading, potentially giving it ample room to reverse course.
- Technology has retreated to the lagging quadrant — not a great look, imho.
- While also in the lagging quadrant, Utilities shows a strong RRG heading and is close to moving into the improving quadrant.
Daily RRG
Switching to the daily RRG, we get some additional context for these rankings:
- Communication services is in the weakening quadrant with a negative heading, but its tail is short and its RS-Ratio remains strong.
- Financials is also in the weakening quadrant but starting to curl back up — it’ll be a close call whether it moves through lagging or not.
- Consumer discretionary is deep in the lagging quadrant, with the weakest RS-Ratio reading on the daily chart.
- Technology is in the leading quadrant but losing relative momentum.
- Utilities show strength in the leading quadrant, moving higher on the RS-Ratio scale.
Notably, consumer staples are making waves on the daily chart, with a strong move into the leading quadrant.
Spotlight on the Top Five
Let’s get back into the trenches and look at the individual charts for our top performers:
Communication Services – XLC
The sector is maintaining its rhythm of higher highs and higher lows, though there’s been some near-term deterioration. The old resistance line is now acting as support — a level to watch in the coming week.
Relative strength remains robust, with the raw RS line trending higher and the RS-Ratio confirming this upward movement. The RS-Momentum line appears to be bottoming around the 100 level, which could signal a potential turnaround.
Financials – XLF
Financials had a stellar week, closing at the top of its range and flirting with all-time highs. The raw RS line has already broken to new highs, and both RRG lines are turning upward. This sector is well-positioned to claim the top spot in the coming weeks potentially.
Consumer Discretionary – XLY
Things are looking a bit dicey for consumer discretionary. We’ve broken below the previous low, establishing a series of lower highs and lower lows. Support levels just below 210 and around 200 are now critical. The RS line has stalled and is moving lower, dragging both RRG lines down.
This sector must hold current price levels and reverse its relative strength decline to maintain its top-five status.
Technology – XLK
Technology is in a similar boat to consumer discretionary. It’s approaching a double support area around 220, with a rising support line and horizontal support from previous lows. The RS line is rolling over and breaking down — if it breaches the lower boundary of its range, we could see more relative downside. Both RRG lines have topped out and are moving below 100, creating that negative heading on the RRG.
Utilities – XLU
Utilities are bucking the trend of technology and consumer discretionary. It’s slowly but surely continuing its upward trajectory, maintaining that series of higher highs and higher lows. While still range-bound, the relative strength chart is starting to trend higher, pushing both RRG lines upward. It’s still in the lagging quadrant, with both RRG lines below 100, but the heading is strong.
Portfolio Performance Update
Unfortunately, we’ve lost the outperformance that was built up over the last few weeks. We’re now neck-and-neck with the benchmark—the RRG portfolio has gained 1.62% since inception, while the SPY has gained 1.68% over the same period.
#StayAlert, –Julius