Louis’ Look (09-15-2020)
One part of the All Star Charts process that’s taken me back is the magnitude of scans they run. If you think of any scan that a technical analyst would be running, I will bet you a penny it’s on their radar.
Though I’m only touching on the surface of the universes we scan, I’ve found incredible value from this exercise. It forces us to pay greater attention to the areas that are working and allows us to pick up on new, emerging themes, such as the unnoticed relentless strength in Materials and Transportation stocks.
Such is the case with Shockwave Medical, a stock we picked up on our new sentiment scan that recently got promoted from the Small to Mid-Cap space, thus joining what we call the "2-to-100 Club."
Click on chart to enlarge view.
Going through our scans made me realize how the guys here at All Star Charts develop unique ways of visualizing public information in a completely new light.
It’s all about passion.
Do you ever notice how your best ideas aren’t formed while sitting at your desk, but rather when you’re out and about, taking your dog for a walk, or making eggs in the morning?
The guys here leverage that idea to its maximum – because they’re always thinking about the market, they’re always finding new themes and unique ideas that others without the same level of passion would simply miss.
It’s clear to me that their excitement for the market is the driving force behind their idea generation.
To use the unfortunate events of Steve Strazza, if you’re not thinking about charts so often that you become tired enough to accidentally smash your electric stovetop when trying to open a coconut, is this really the business for you?
On a more serious note, Steve and I have been doing an extensive amount of work on a variety of scans recently, and I want to share one of them with you today.
As a team, we're always bouncing ideas off each other - I'm continually sending across new scan ideas. From this point, we'll discuss it, think about it while making some eggs or doing errands, and get together to realize, "Hey, perhaps we should be looking at new short-term lows considering the recent market weakness," or something along those lines.
This process of constant brainstorming encouraged me to look at the market from a bottoms-up perspective – identifying the strength of a country, sector, or industry through the characteristics of individual stocks.
While the top-down approach shows us where the macro strengths and weaknesses lie, the bottom-up approach confirms it.
The guys here have been slamming the table on the relative strength in the Materials sector with their layers of intermarket analysis, so it’s no surprise to see the sector hold up great on a global scale.
We can see below that within our universe of all US-listed ADRs, Materials has been the sector that has seen the least amount of new lows from its components during the recent selloff.
Click on the table to enlarge view.
By piecing together these scans, it's becoming clearer to me that there's a very high correlation between the passion one has toward the market and their ability to use whatever information at their disposal in an entirely new light.
Would you agree?
I encourage you to get in touch at louis@allstarcharts.com to let me know your thoughts or any important lessons you've taken on this week too.
Thanks for reading,
Louis