This concept of new 52-week highs can be somewhat confusing. I get it. How does it work? If we make new highs and the list of new highs doesn’t confirm, do we short everything? How do we know if and when the internals of the market have confirmed or diverged from whatever the price of the index itself is doing? These days, it seems like people have more questions than answers. So today we’ll take a look at what’s going on and see if we can try to work through it together. [Read more…]
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…]
The US Stock Market has been like watching grass grow. It’s a hot mess and I’m all for it. We turned Neutral towards US Stocks in March so watching both the bulls and the bears get whipped around is great theater from our cash heavy seats. Nothing I’ve seen in the past couple of weeks has changed my opinion on this environment. To the contrary, everything continues to suggest having huge cash positions and not trying to be too aggressive – long or short. Cash is king sometimes and neutral is a position too, don’t forget that.
Many of us have the ability to invest in other markets. For the few of you who cannot, I still think it’s a good learning experience and a valuable academic exercise to explore other markets. You might not be trading (or allowed to trade) foreign markets today, but I promise you that one day in the near future, buying stocks in India will be as seamless as buying Microsoft or Apple. For most of us, it already is. The world is getting smaller, not bigger. [Read more…]
Last week the Nasdaq100 went out at new all-time weekly closing highs. While that might seem like a bullish characteristic on the surface, I think it’s important to recognize what is happening within the actual index itself. Like I always try and reiterate, this is not a “stock market”, it is a market of stocks. Today we’re going to take a look at what is actually going on here. [Read more…]
It’s hard to ignore certain market moves that tend to be very rare. Bullish outside days that engulf the prior period are one of those. I think this is exactly what we saw this week in the AMEX Arline Index and it is something we want to respect. This is especially the case if you consider where this bullish reversal took place, just below important support. [Read more…]
Intermarket Analysis is a fantastic tool that is available to us as technicians regardless of our time horizon. Certain gauges of risk appetite, or risk aversion, can be seen simultaneously throughout various asset classes. We use these correlations as confirmations or divergences from data we’re getting elsewhere. Today I want to focus on the direction of the U.S. Interest Rate Market and compare it to the data we’re getting from Regional Bank Stocks and Real Estate Investment Trusts. The relationship between Banks and REITs is similar to the tug of war going on between investors in the Bond Market. [Read more…]
I’m lucky in that I learned early in my career that we’re in a global market place. The United States, while it is certainly important, is just one country within a massive interconnected global market. We see this more and more every day. Many choose to focus on US Stocks, and that’s fine. But I think even if that’s the case, approaching the market globally is not only an advantage, but becoming more of a necessity with each day that passes.
Today I want to share a chart that really tells an interesting story about what is actually happening in stocks around the world. I’ve taken the 10 largest exchanges in the world, including both developed and emerging markets, and equally-weighted each of them to create an All Star Charts Top 10 Global Exchanges Index. You can see embedded in the chart, the exact list of components: [Read more…]
While so many people seem to be focused on the major US Indexes like the S&P500 or the Dow Jones Industrial Average reaching the irrelevant 20,000 level, I prefer to focus on individual stocks and sectors. There are areas of strength, like Technology obviously, and areas of weakness like Healthcare and Consumer Staples. Stocks are like investors, there are winners and losers. I prefer to be a winning investor focused on winning stocks, wouldn’t you? Today we’re taking a look at Technology as it quietly breaks out again to new highs. [Read more…]