I get asked all the time about my process. A big question is usually around how did I find that chart in such a “random” country or asset, like an ETF on South Korea or a futures chart like Soybeans. To some people these might be assets that are not on their radar, but they are just as easy to trade as Apple shares or Crude Oil, that obviously get much more attention. My answer is simply that I look at all of them and just bring out some of my favorites. This is habit that I got into many years ago, so for me it’s second nature.
With that theme in mind I thought it would be a good idea to share my diary of what it’s like to go through so many charts. Sometimes I go through International Charts, other times Commodities or Currencies. On Monday I published my deep dive on the Major US Indexes and the bullish developments we’re seeing. Today we are taking that one step further and going over every single S&P500 component on both weekly and daily timeframes. I have some personal additions like $TSLA and $DNKN for example, so in total that represents well over 1000 stock charts in this particular session.
From here on in you’re only reading my thoughts as I go through the entire process:
(click on each chart to zoom in)
We’ve been able to avoid some short-term messy sort of action lately. We’ll take it. The breadth internals of the market had been suggesting since early March that something was wrong. The major indexes breaking uptrend lines further emphasized those characteristics of distribution. Momentum putting in bearish divergences at the highs from Q4 and Q1 this year also pointed to more neutral positioning towards equities. Most of our upside targets had also been achieved by early March and that was difficult to ignore. It’s a weight-of-the-evidence approach for me, there’s no question.
Today we’re going to make the bullish case for US Stocks. Not that I think we rip higher every day from here and we need to buy everything in sight, but I do think it’s worth paying attention to the developments from early this week. I also want to pinpoint exactly what we want to see moving forward before getting full on aggressive towards US Stocks as we did in July last year and in late January before that. [Read more…]
Here is the video recording of the April 2017 Monthly Conference Call for Members Only
In the call we discuss:
- Stock Market Breadth Deteriorating
- International Markets Achieved Upside Objectives
- US Indexes in No-Man’s Land
- Losing Leadership From Financials
- Neutral Is A Position Too!
- Some Sectors At Make Or Break Levels
- Precious Metals
- Bonds & US Interest Rates
In this week’s members-only letter we discuss the following topics:
- Why Neutral Has Been A Great Approach Over The Past Month
- Consolidations In Germany, Canada and London Appear Continuation In Nature
- What The Strength In Italian Stocks Means To Me
- This Breakout In Tesla Shares Is For Real
- Bitcoin Is The Strongest Currency On Earth
- Silver Speculators Put On Historic Long Positions
- The US Dollar Index Is In A Long-term Uptrend
- What We Need To See To Become Bullish Stocks Again
- Why 2.3% in US 10-year Yields Is The Level To Watch
This is JC’s Playbook to Profit In Q2: [Read more…]
One of the most important tools we have as technicians is the ability to measure momentum. Remember, buy side fund managers are obsessed with looking for stocks and assets showing momentum. They hate sitting in things that aren’t doing anything. Whether you’re a buy side fund manager or not, it’s important to think this way. Opportunity cost (where else you can invest that money) is important too. Looking for stocks with bullish momentum characteristics is something we want to do when markets are in an uptrend. When momentum starts to fade, it’s a heads up that price is likely to follow.
Today I want to focus particular attention on the breadth of momentum. We want to approach this as a market of stocks, not a stock market. There are many components that drive these indexes, sometime more than others depending on the index. We can focus on particular areas like energy or financials, or different market caps large or small. I also want to know how momentum in the entire market is doing: Are we seeing positive momentum characteristics or negative ones?
Here is the video recording of the March 2017 Monthly Conference Call for Members Only
In the call we discuss:
- Bearish Momentum Divergences All Over
- Targets Hit All Over
- Leaders Are Failing
- Intermarket Signals Flash Warnings
- Sentiment Status
- Which Weak Names Do We Short?
- Commodities and Currencies
- Rates and Bond Trade