We talk about a lot of different markets here and we use a lot of different information to come up with a thesis. We look at International Stock Markets, Interest Rates, Sector Rotation, Individual Stocks, Breadth Measurements, Currencies, Commodities and an endless supply of Intermarket Ratios. But today I want to talk about a breakout that we’ve been waiting for now for some time. [Read more…]
I have been unapologetically bullish of stocks, not just in the U.S. but all over the world. The data that continues to come in, not only confirms everything we’ve been seeing, but actually suggests that an even more bullish approach moving forward is warranted. The sector rotation in US Stocks and leadership from International Markets is pointing to not just some short-term gains, but in fact, much higher prices coming across the board. In this call we take a look at the extreme positioning in some very important markets like Gold, US Dollars, Euro and US Treasury Bonds. I think the extremes in sentiment could spark a major unwind as we head into the 4th quarter. [Read more…]
One of the best ways to get a gauge of the strength or weakness in the U.S. Stock Market is to go through all of the stocks in the indexes. Every week I rip through all 500 stocks in the S&P500 on both weekly and daily timeframes. This works well for 2 reasons: 1) it gives me a great idea of how the entire market looks collectively, but it also allows me to find individual risk vs reward opportunities throughout the market. It works great for both.
For people who simply don’t have the time, or interest, to get that deep into market analysis, I find the Dow 30 review to be really helpful. If you take a look at a chart of the Dow Jones Industrial Average going back 100 years and overlay it with the S&P500, they look pretty much the same. So if their correlations are that high, then going through the Dow 30 components on both weekly and daily timeframes is a much more efficient use of time.
First of all, these are 30 of the most important stocks in America, so that by definition makes them 30 of the most important in the world. Second, we want to take a weight-of-the-evidence approach here and ask ourselves, Are there more good ones or bad ones?
Today I wanted to walk you through the process so you can see where I’m coming from as I lay out my conclusions. [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’ve been bullish towards US and Global Stocks as they remain in strong uptrends on any sort of intermediate-term time horizon. I still think this is an environment where we need to be buying weakness in stocks, not selling strength. The weight of the evidence is still pointing to an increased amount of risk appetite, not risk aversion. We will go over a multi-timeframe approach on this conference call where we will start with the longer-term and then work our way down to more short-term to intermediate-term investing ideas. This will also include other assets like Gold, Silver, Crude Oil and Interest Rates.
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! This month’s Conference Call will be held on Tuesday September 12th at 7PM ET. Here are the Registration Details: [Read more…]
The monthly charts aren’t saying anything. Charts can’t speak remember? It’s up to us to take the behavior of the market and come up with our own interpretations of what is going on. There is no easy way to do this, just a lot of wrong ways. To help us continue to stay on the right side of the market, we always need to reevaluate the circumstances and come at it from all sorts of different angles. Usually we try and do that by incorporating International Indexes and Intermarket relationships into our process. Time, however, is probably the best tool we have in order to accomplish this. Using multiple timeframes throughout my process is the best way I know how to identify the direction of the primary trend. It’s hard to miss it when you’re consistently using Daily, Weekly and in this case, Monthly charts in your approach.
I have a lot of Monthly charts, as you can imagine. But the truth is that for this particular segment I try and focus on the message of the charts as a group. This exercise also really helps point out certain trends that you may have missed had you only gone back 5-10 years. These monthly candlesticks also tend to tell a story. So there are a lot of benefits in reviewing monthly charts at least once a, well month, because those are the only times they change. Even if you’re not a professional, going through monthly candles once a quarter is probably a good idea. I encourage everyone to incorporate this somehow into their process.
Here are some of the things that stand out to me in the this Monthly Candlestick Review: [Read more…]
The Dow Jones Transportation Average has been one of the best leading indicators for the direction of markets over the past few years. This index peaked in late 2014, six months before the S&P500 put in its top. The Transportation Average also bottomed out in January 2016, the month before the S&P500 finally made its bottom. Moving forward, we want to continue to give this index the weighting it deserves.
With the recent underperformance out of this group, let’s dive in and see what is going on underneath the surface. Is this the beginning of a major sell-off in Transports, which would lead the rest of the market lower? Or has this just been a correction within a strong uptrending market? [Read more…]
Last week I published, A Non-Random Walk Through The S&P500, where I went into detail about what I’m seeing across every single sector in the United States until I’ve gone through all 500 stocks in the entire S&P500. This is done on both a weekly and daily timeframe, so it’s a little over 1000 charts in total. Without a doubt, the conclusion was clear: this is still a stock market environment to buy weakness, not to sell strength. In this month’s Conference Call we discuss a lot of the supplemental data, particularly around the world, to support those bullish views towards stocks. While there is a nice list of trade ideas in this call, I encourage you to use the Walk Through The S&P500 and this Conference Call together. I think they compliment each other really well. [Read more…]
The way I learned it was that the Bond Market is smarter than the Stock Market. I’ve heard theories that it’s because the Bond Traders are smarter than stock jockeys. Maybe it’s because the Bond market is a lot bigger than the Stock Market. Maybe it’s all a bunch of nonsense. Who knows? The way I like to approach it is simply to use them both to my advantage equally. They both play a role in the process. When we see evidence of risk appetite in the stock market, we want to see the bond market confirming that and vice versa. It’s when one is suggesting one thing and the other is signaling something else that we start to question what is really going on here.
Today we’re going to focus on 3 specific spreads that we want to be watching closely here as the Summer comes to an end.