For someone who uses Dow Theory every single day, it’s not something that I write about much. I may indirectly reference certain tenets all the time, but rarely do I write specifically about the 130 year old Dow Theory. I think I pretty much laid it all out earlier this year in my post: 5 Things Every Investor Should Know About Dow Theory. The simple minded choose to stick to the Dow Jones Transportation Average and Dow Jones Industrial Average either confirming each other or diverging from one another. And while this may in fact be a one of Charles Dow’s tenets (although they were Railroads back then, not the Transports we have today), it does not even make it into my top 5 most important tenets. [Read more…]
[Chart Of The Week] The End Of The Worst Time Of The Year For Stocks
It’s important to recognize what type of environment we’re in for the market. During different times of the year, traders and investors tend to behave in certain ways. When you smooth out the data over many years, their patterns become clear. We all hear about, “Sell in May and Go Away”, but what about, “Remember to Buy In November”?
Today we’re focusing in on the end of what is historically the worst seasonal period of the year for the Dow Jones Industrial Average. So what happens next? [Read more…]
[Chart Of The Week] This Important U.S. Stock Index Is Breaking Out
We’ve just witnessed one of the most epic rallies in the stock market that we’ve seen in a long time. Remember, this has been dominated by global indexes, particularly Emerging Markets, not U.S. Stocks. We could not be happier to see this rally progress so well as we’ve been pounding the table to be long since late January. By mid-February, the U.S. and other developed markets put in their bottoms and started to play catch up to the rest of the world. But the underperformance of the U.S. has continued anyway.
Today’s Chart Of The Week represents what could potentially be the start of a major structural improvement for U.S. Stocks: [Read more…]
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- What Do We Do With The U.S. Indexes Now? S&P500, DJIA, etc
- The Best Trade In Precious Metals: Gold & Silver
- About That Squeeze Higher in Chinese Stocks
- My Favorite Energy Trade Today
- What Are We Going To Do About This Messy Bond Market?
- The Best Tech Stocks: Apple, Microsoft, Google or Facebook?
- What Does The Weight-Of-The-Evidence Suggest About Risk-Appetite?
[Premium] Everything You Need To Know About The US Stock Indexes: S&P500, DJIA, Nasdaq100, Russell2000, Mid-cap400
We’ve been pretty neutral the majority of the U.S. Stock Market indexes over the past couple of weeks since they first starting hitting our upside targets. Some of them, like the Nasdaq100 and Mid-cap400 had yet to reach out upside objectives, but we are approaching those now. I will argue, though, that the developments we’ve seen are constructive, both in price behavior and in the breadth itself.
Here is what I think we need to keep in mind with each of the major Indexes. We’re using only bar charts today in order to put extra emphasis on price for this particular exercise: [Read more…]
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- S&P500, DJIA, Nasdaq100: Buy, Sell or Hold?
- What Is The Best Way To Invest In The Chinese Stock Market?
- What Other Asian Countries Should We Be Buying?
- Which Commodities Are The Next Ones To Rip Higher?
- With Interest Rates On The Rise, How Do We Profit?
- Why Is Dollar/Yen The Most Important Chart For U.S. Stocks?
- What Other Currencies Do We Need To Own Today?
[Premium] Weekly Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- Our Focus Is On Japanese Yen and Ignoring Any Federal Reserve Commentary
- Which U.S. Stock Market Indexes Have Hit Our Upside Targets?
- What Do We Need To See To Get Short U.S. Stocks?
- The List Of Commodities That Are Now In Play
- Why Financials Will Keep Outperforming
- What Do Semiconductors and Industrials Have In Common?
- Which Sectors Are Benefiting Most From Higher Interest Rates?
[Premium] What Intermarket Analysis Is Suggesting About The Current Market Environment
Intermarket Day is one of my favorite days. Yes I’m a huge nerd. Deal with it!
This is when I go through many markets relative to each other. These markets include individual U.S. Sectors compared with the overall U.S. Stock market. We also look at other assets against each other like Bonds, Commodities and Currencies. We price Gold in other currencies, and change around denominators for both trade idea generation and also for informational purposes.
Here are some of the things that stood out from this week’s homework:
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