Argentinian Stocks Are On A Run… [Dirty Dozen]

“I don’t like the word ‘instinct,’ because it just sounds like a gut thing. I think what we call instinct is really a type of pattern recognition, which comes from experience looking at the companies and industries that work.” ~ Daniel Loeb

In this week’s Dirty Dozen [CHART PACK] we talk about how the LEI YoY index is turning up and what that means historically for stocks. We then update the supportive environment by going through internals, liquidity, and the tape. We end with a bullish pitch on BTCUSD and Argentinian stocks, plus more… 

1. No new primary signals last week but our weekly Nervous & Numb indicator continues to toe the line of triggering a sell signal. 

2. N&N’s current reading sits at 1.95 (yellow line) and a sell signal requires a reading of 2 or above. Our Trend Fragility indicator (green line) is back above 90, which is where price action tends to become more volatile. 

3. The Conference Board’s Leading Economic Index YoY% is trending up from below zero… 

4. This happens to be the best returning regime for equities historically, with average annualized returns of +29.5%. 

5. All major US indices are in a Bull Volatile regime, outside of the Russell which remains in a Bull Quiet. Markets top in Bull Volatile regimes though being in a Bull V doesn’t necessitate an immediate top. 

The Qs are in a sideways channel. Since the backdrop of positioning, liquidity, and internals remain supportive, we’ve placed buy stops right above this range in order to get back in should the market break out higher. 

6. Aggregate market internals continue to remain supportive of the bull trend.

7. BofA’s Bull & Bear indicator inched down last week to 6.1 and sits firmly in neutral territory. 

8. Here’s last week’s scores on the doors… The Qs were the top performing US index. Home builders, semis, banks, and industrials led the sectors/industries. And Turkey (TUR) was the top performing international market. 

9. Since we’re in Bull Volatile we should expect to see more chop and vol. But as long as internals remain supportive and liquidity stays flush it’s unlikely we see anything more than standard bull leg corrections on the path higher. 

10. We got back in long BTCUSD over the weekend. It completed a pullback reversal at its lower daily Bollinger Band and has broken out of a bullish flag. Both positioning and sentiment remain surprisingly bearish, which is supportive of the uptrend. 

11. Argentina (ARGT) closed at new all-time highs last week. The market seems to so far be approving of the job that the freshman president Javier Milei is doing. Here’s the year-to-date performance of ARGT’s holdings (chart via Koyfin). 

12.  ARGT stocks have not been getting much fanfare despite the incredible runs some of these names have been on over the past few months. Banco BBVA Argentina S.A. (BBAR a US ADR) is up 128% in total returns over the past year. It recently broke out of an extended compression regime. Chart below is a monthly. 

Thanks for reading.

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Brandon Beylo

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Brandon has been a professional investor focusing on value for over 13 years, spending his time in small to micro-cap companies, spin-offs, SPACs, and deep value liquidation situations. Over time, he’s developed a deeper understanding for what deep-value investing actually means, and refined his philosophy to include any business trading at a wild discount to what he thinks its worth in 3-5 years.

Brandon has a tenacious passion for investing, broad-based learning, and business. He previously worked for several leading investment firms before joining the team at Macro Ops. He lives by the famous Munger mantra of trying to get a little smarter each day.


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