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John Kosar
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John Kosar, CMT, is Director of Research of Asbury Research LLC (http://www.asburyresearch.com/). Since 2005 Asbury Research has been providing in-depth, comprehensive financial market research to professional investors that understand the value and importance of incorporating technical,... More
My company:
Asbury Research LLC
My blog:
Logic-Over-Emotion Investing
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  • Technology Sector: How Current Asset Flows May Affect Q3-Q4 Performance

    Excerpt From: Asbury Research Commentary
    Asset Class: Technology
    Topic: Current vs. Historic Asset Flows
    Date: July 18th, 2013

    Chart 2 below measures the flow of investor assets in and out of the various sectors of the S&P 500 via our own metric, a pie chart that displays the percentage of sector bet-related assets, as represented by the Rydex Sector Funds, that are invested in each sector of the S&P 500, as represented by the iShares Select Sector SPDR ETFs.

    The purple highlights on the chart point out that Technology currently comprises just 4% of our "sector pie" - which is just a fraction of its historical daily average of 15% since 1998.

    (click to enlarge)

    Asbury Research's Asset Flow Metric: US Market Sectors

    This metric indicates that, despite recent relative sector outperformance, Technology is still historically very under-invested versus the other sectors of the US broad market index and thus amid favorable conditions for upcoming outright strength and relative sector outperformance.

    The blue line in Chart 3 below plots the daily relative performance of the NASDAQ 100 versus the S&P 500 since 2005. The green highlights point out that the last time that Technology comprised just 4% of our sector "pie" as shown in Chart 2 was at the end of Q3 2008, which the light green highlights show marked the beginning of an extended period of relative strength that saw NDX outperform SPX by 45% into April 2012.

    (click to enlarge)

    Relative Performance of NASDAQ 100 vs. S&P 500: 2005-2013

    We are not suggesting these data ensure that another similarly huge, multi-year period of relative outperformance by Technology is emerging now, but rather that historic extremes in our asset flow-based metric as shown in Chart 2 often define special investment opportunities.

    continued…


    Our asset flow-based pie chart, as shown above, has proven to be very adept at identifying upcoming 1-2 quarter trends of relative sector outperformance or underperformance, but it is not intended to be a timing tool because it is typically a leading rather than coincident indicator. In other words, it is usually "early". Our trend model utilizes a more near term oriented, price and momentum-based component to signal precisely when this upcoming move is getting underway. More about our trend model, plus recent performance data, is available by clicking here.

    Tags: XLK
    Jul 29 11:26 AM | Link | Comment!
  • Smart Money Making A Huge Bet On Copper

    The following (green highlights) is an excerpt and chart from our July 12th Investor Sentiment Survey report (access requires subscription).


    Excerpt From: Investor Sentiment Survey
    Asset Class: Commodities
    Topic: Copper Prices
    Date: July 12th, 2013

    Chart 2 measures investor sentiment in copper prices according to the positioning of Commercial Hedgers in the COMEX copper contract, which are defined by the Commodity Futures Trading Commission (CFTC) as those holding 100 or more contracts that are "…engaged in business activities hedged by the use of the futures or option markets".

    The red line in the upper panel chart plots the weekly net position of these Commercial Hedgers since 2002, with a corresponding weekly chart of the copper contract in the lower panel.

    (click to enlarge)

    COMEX Copper & Commercial Net Long Position

    The rightmost green ellipse in the upper edge of the chart points out that the Commercials were net long 39,801 contracts at the end of June, which is their largest collective net long position for copper in the 30-year history of the contract.

    The other green highlights show that lesser net long extremes, of around 24,000 contracts, have closely led what have been the 4 most important bottoms in copper prices during the past decade. Accordingly, this metric suggests that economically-sensitive copper prices are either at or near another similarly important bottom now.

    continued…


    Copper prices are universally seen as a global economic barometer and, at least up until recently, have maintained a statistically significant and dependable 25 year positive correlation with the Dow Jones Transportation Index (DJT).

    Thus, we view the current positioning by these Commercial Hedgers as an aggressive bet by the "smart money" on an upcoming intermediate to long period of global economic growth.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

    Tags: long-ideas
    Jul 17 4:42 PM | Link | Comment!
  • Replay Of John Kosar's June 26thMarket Technician’s Association (MTA) Presentation

    On Wednesday June 26th, the Market Technician's Association's (MTA) Educational Web Series presented an educational webcast event featuring John Kosar, Asbury Research's Director of Research.

    Click the title below to view the video replay and to download the accompanying PDF:

    "US Financial Update for June-July 2013″
    with John Kosar, CMT

    Jun 27 2:08 PM | Link | Comment!
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