Below is an updated look at our global stock market trading range screen using 30 of the largest country ETFs traded on US exchanges.  For each country, the dot represents where it’s currently trading, while the tail end shows where it was trading one week ago.  The black vertical “N” line represents each country’s 50-day moving average, and moves into the red or green zones are considered “overbought” or “oversold.”

While it seems like markets have been doing nothing but go up lately, there’s actually been quite a bit of movement in both directions recently.  Of the 30 ETFs in our screen, 10 are currently overbought while 5 are oversold.  Brazil (EWZ) and Spain (EWP) are examples of countries that have moved lower down into oversold territory over the last week.

Even still, the average country ETF in our screen is still up more than 20% on a year-to-date basis.  Quarter-to-date, the average country ETF is up just over 1%.  Brazil, Colombia, and Mexico have done the worst this quarter, while China, India, Japan, South Korea, and Vietnam have done the best.

It’s been quite a run for the S&P 500 over the last several weeks, and the chart below illustrates just how consistent the equity market’s strength has been.  The chart comes from the second page of our daily Morning Lineup report, which is available to all Bespoke Premium and Institutional clients.  In it, we show the S&P 500’s daily close relative to its 50-day moving average (DMA) where overbought levels are considered to be readings where the S&P 500 closes one or more standard deviations above its 50-DMA, while oversold levels are readings where the S&P 500 closes one or more standard deviations below its 50-DMA.  As shown in the chart, ever since September, a period now covering 42 trading days, the S&P 500 has closed at either an overbought or extreme overbought level.

Looking at the chart, the current streak of overbought closes is easily the longest of the last year, but looking further back at the current bull market, there have only been three other periods where the S&P 500 closed at overbought levels for 40 or more trading days.  The chart below shows the S&P 500 through the course of the entire bull market dating back to March 2009.  As shown, two of those prior streaks occurred within ten trading days of each other when a 45 trading day streak ended on 11/12/10 and another one began on 12/1/00.  Besides those two streaks, the only other streak of 40 or more trading days was back in early 2012 when a 43 trading day streak came to an end in March 2012.  Finally, while it may be hard to see on the chart, in both the one and six months that followed these prior streaks coming to an end, the S&P 500 was up all three times.  Three months later the S&P 500 was up two out of three times with the one down period coming after the March 2012 streak when we saw a decline of 5.8%.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

See this week’s just-published Bespoke Report newsletter by starting a no-obligation two-week free trial to our premium research platform.

US Policy

House Tax-Cut Plan Hurtles Toward Senate Roadblock by Erik Wasson (Bloomberg)

The House’s proposed tax overhaul is many things: large, far-reaching, and complicated. Unfortunately for ease of passage, one thing it’s not is compliant with Senate rules around deficit impact that would mean it needed 60 votes to pass. [Link; auto-playing video]

Powell rose to top of Trump’s list as safe, savvy choice for Fed by Howard Schneider and Jonathan Spicer (Reuters)

A good tick-tock of the chain of events which led up to the pick of Jerome Powell as the next Chair of the Federal Reserve. [Link]

Related: This series of tweets from Josh Zumbrun of the Wall Street Journal is also a fascinating insight into the butterfly effects which gave Powell his appointment. [Link]

The Fed Chair Should Be a ‘Principled Populist’ by Stephanie Kelton ad Paul McCulley (NYT)

An interview between leading modern monetary theory advocate Kelton (former Senate Budget Committee Democratic staff Chief Economist and now of Stony Brook University) and former Pimco chief economist Paul McCulley. [Link]

International Affairs

Saudi Arabia arrests princes, ministers and tycoons in purge by Ahmed Al Omran and Simeon Kerr (FT)

In a sudden move, aging King Salman cleaned house to consolidate power for his named heir, Crown Prince Mohammed bin Salman. [Link; paywall]

Crypto

As ICOs Get Paris Hilton-Style Celebrity Push, SEC Urges Caution by Benjamin Bain and Matt Robinson (Bloomberg)

This week the SEC noted celebrity endorsement of ICOs could put them at legal risk based on federal securities laws, a notable regulatory move in the current wild west of initial coin offerings. [Link]

Batteries

Nanodiamonds Found to Prevent Lithium Battery Fires by R. Colin Johnson (EE Times)

A possible solution to lithium ion battery fires has been proposed, but not yet proven in actual deployment with devices. [Link]

Military Matters

The Army’s Radical Fitness Shift by Rachel Bachman (WSJ)

New fitness tests are being added to the Army’s Combat Readiness Test, and proposed standards would not differ between the sexes now that all combat roles are open to women. [Link; paywall]

Research

Many Academics Are Eager to Publish in Worthless Journals by Gina Kolata (NYT)

With huge incentives to publish as much as possible, a galaxy of dubiously relevant journals have sprung up as venues for the academic community. [Link; soft paywall]

Football

Waiting to inhale by David Fleming (ESPN)

An oral history of the dubious practice of inhaling smelling salts on NFL sidelines. [Link]

The NFL’s Offensive Line Crisis Has No Single Diagnosis by Robert Mays (The Ringer)

The bedrock of any talented offense is an efficient offensive line, but the modern NFL is finding it increasingly difficult to recruit and maintain cohesive fronts. [Link]

Have a great Sunday!