It’s hard being a gold bug. They rarely ever get to be right. But why don’t they ever change their mind when the data changes? I don’t get it. There is nothing wrong with being bullish gold, but there is something wrong with always being bullish gold. [Read more…]
This is one of my favorite exercises. We want to recognize that we as human beings are terrible investors. It’s not our fault, it’s just how we’re built. So to overcome that we first to be aware of it. This alone puts you in the 1% and gives you a huge advantage over others who are not aware. To further help ourselves, we need to avoid letting our other biases affect our judgement. This is almost impossible. [Read more…]
My weekly run through the S&P500 components is one of my favorite parts of the work week. I put on some music and go through all 1000+ charts. Remember we use the weekly charts to get structural perspective and then the daily timeframes to define more tactical opportunities: 2 charts for each of the 500 stocks. I then break down the index into 11 Sectors and run my analysis of stocks one sector at a time. This way it helps give me a better feel for that particular area within the entire stock market. To take it one step further, I then break down each of the 11 sector workbooks of charts into sub-sectors. So for example, in the “Energy Sector” there will be 4 sub-sectors: Integrateds, Services, Exploration/Production and Refiners.
The reason I’m really pressing this process lately is because of just how sideways the market has been for U.S. Stock Indexes. In order to get clues as to which way this consolidation will revolve is to look under the hood and see what’s going on. Does the body have some strong organs left to keep it alive, or is this it? You can’t just look at a car or look at a person and be able to properly diagnose the problem, or the good health for that matter. You need to open them up and take a good look. A mechanic is an expert at analyzing the car, the Doctor knows the human body and we as market participants need to understand the insides of the market. [Read more…]
Here is the video recording of the May 2017 Monthly Conference Call for Members Only
In the call we discuss:
- Stock Market Breadth Deteriorating
- The Rest Of The World > US Stocks??
- What Intermarket Relationships We’re Watching
- International Indexes
- US Indexes, Sectors and Stocks
- Commodities, Currencies and Bonds
- Follow Up This Week With S&P500 Stocks Research Report
We live in a world of if/then statements. That’s just the way it is. I don’t know what’s going to happen tomorrow, or next month or next year. But that’s okay because no one else does either. That whole lie about “uncertainty” is just that: a lie. There is always uncertainty. That’s the point of all this. So we do our best to put together a road map filled with if/then statements. If the market does this, then we will do this. If that market does that, then we’ll have to do that. This is the case today, it’s been no different in the past and will likely be the same in the future. I don’t know of any other way to manage risk responsibly.
These if/then statements are always changing, of course. The big question mark today is whether or not the U.S. Stock Market will begin to see an improvement of breadth, or if the deterioration will continue. In the past I’ve outlined some of my favorite breadth measures. Most of these are not confirming the new highs we’re seeing in the S&P500 this week. But that statement is not fair on its own. The word “yet” needs to be added to the end of that sentence. That’s how this works. [Read more…]
When we talk about “stocks”, it can be in reference to many things. Most people like using something like the S&P500 or Dow Jones Industrial Average as a gauge because those are the popular United States indexes which contain many of the world’s largest companies. That’s fair. Depending on what country you live in, your interests are likely to be on your local indexes while you also keep an eye on maybe the United States and/or European Averages. I think it’s important to understand that while these indexes are made up of companies based in local economies, the investors that own those stocks come from all over the world. We live in a global marketplace and I think it would be irresponsible of me as an investor to ignore that.
There are a lot of tools I use to measure the strength or weakness of the overall stock market environment. One of my favorites is a global index I created where I equally weight the largest 10 stock markets in the world. Each country represents 10% of the Allstarcharts Equally-weighted Top 10 Global Index $GLOBE. It includes both Emerging and Developed Markets. So you’ll get Japan, London, Europe, Canada, US but also Brazil and India for example. The entire list is on the chart below: [Read more…]
Every month I host a conference call for All Star Charts Premium Members where we discuss ongoing themes throughout the global marketplace as well as changes in trends where new positions would be most appropriate. This includes U.S. Stocks & Sectors, International Stock Indexes, Commodities, Currencies and Interest Rate Markets.
We had been implementing a much more neutral approach towards equities and even most commodities since early March. This strategy worked well as many stocks, sectors and countries were in a sideways mess. Over the past week or so I believe things have changed and there are plenty of risk vs reward opportunities on the long side that we’ve outlined in recent letters.
I’ll do my best to lay out my weight of the evidence conclusions and walk you step by step with how I got there! It will be held on Thursday May 18th at 7PM ET. Here are the Registration Details: [Read more…]
In this week’s members-only letter we discuss the following topics:
- This Was A Bullish Week For US Stock Market Indexes
- Why I Love This Crash In Silver!
- Bitcoin Continues To Laugh At All The Gold Bugs
- A List Of Bullish and Bearish Characteristics for the Market
- Cyber Security Stocks Break Out
- Apple and Google Still Have Room To The Upside
- Which Transportation Stocks Do We Need To Own?
- Industrials Like 3M and CAT Can Still Go A lot Higher
Most of you who know me already know that I incorporate a top/down, weight-of-the-evidence approach. It’s not just 1 chart or 1 indicator that says to be long or short the stock market. It doesn’t work that way. For me, I put in the work, weigh ALL of the evidence, and then put together a thesis. From there we then look to execute. Since March, however, a more neutral approach towards stocks has been my big theme. As we come into May, I see no evidence that suggests changing that strategy. Cash heavy still makes sense until the data changes and points to allocating that cash once again, long or short.
Today I want to go over a chart that I think the US Stock Market bulls are going to love. To me, it is potentially the most bullish chart in the entire world. [Read more…]
In this week’s members-only letter we discuss the following topics:
- A Big Change In US Treasury Bond Positioning This Week
- Is It Time To Short Silver?
- Consumer Staples Massive Top Relative To S&Ps?
- Energy Looks Terrible
- Breadth In US Stocks Not Confirming Price Action
- CRB Index Breaks Down With Chinese Stocks
- Mega-cap Tech Continues to be the Leader
- 1 Bitcoin Now Worth More Than 1 oz of Gold
- Financials As A Sector Not Showing Improvement
- Retailers To Likely Drag Down Discretionary Stocks