We're now over 2 years into a bull market, so you know what that means?
It means correlations have come off a lot.
Keep in mind that when volatility spikes, correlations among S&P500 components shoot up to one.
It seems like they all move together, either up or down, depending on how the day goes.
We saw that in 2022 and we most certainly saw that during Covid.
But now that we're 2 years into this bull market, correlations have come off so much that it is easier than ever to find BOTH winners and losers out there.
This is NOT an "everything moves together" market. It's actually the furthest thing from it.
Take a look at SharkNinja, for example, making new all-time highs again this month.
Earlier this week I was just trying to do some harmless research on SharkNinja $SN and now I got my wife asking me why I'm looking at women's vibrators on amazon...
"It's just part of the job babe. Just part of the job..."
Apparently SharkNinja's product line extends beyond vacuum cleaners and blenders.
I had to learn that one the hard way...
Meanwhile, a big question I find myself asking here is whether or not this chart in Visa $V looks like a top? Or if it just looks like a normal multi-year consolidation, within an ongoing uptrend, that is now resolving higher?
Think about the implications of this one here above.
I don't know if you realized this, but Visa has a market-cap of over $550 Billion and is currently the 13th largest component of the S&P500.
It's also the 3rd largest weighting in the U.S. Financials Index, behind only Berkshire Hathaway and J.P. Morgan.
As far as the Dow Jones Industrial Average goes, Visa is the 7th largest weighting in the Index (4.27%).
On the flip side, here's Boeing, which does not look anything like Visa and SharkNinja above.
As the S&P500 and Dow are hitting new all-time highs, Boeing is down near 52-week lows...
A break below the April lows near 160 and the downside here in Boeing $BA likely takes it below 120.
It's going to take a rally back above 172 for the risk to change to the upside.
But that doesn't change the fact that Boeing looks a heck of a lot different than Visa, SharkNinja, and most of the other leading equities at this point in the cycle.
And it's because correlations have come off so much, that it's easier to find both winners AND losers.
That hasn't always been the case.
But it is currently:
All this means is that it's helpful to keep an open mind about looking for opportunities to buy stocks, as well as opportunities to sell them.
It's a two-way market.
I'm old enough to remember when we used to call this, "normal".
I outlined my favorite opportunities right now, while at the same time putting the rest of the market action into context.
This includes Sector Rotation, Intermarket Relationships, 2-to-100 Club, Natural Resource stocks and some of the foreign stocks that trade on U.S. exchanges that are providing opportunities from the long side right now.
I love fresh monthly candlesticks. I love to talk about them. And, more importantly, I love what they tell us.
We ripped through 130 charts and tables in a little more than an hour during the September Monthly Candlesticks Strategy Session last night.
ASC Premium Members, click here to review the recording and the chartbook.
Now go see what else is happening around All Star Charts...
Technology in Purgatory. I do think eventually tech does break out to new all-time highs relative to the S&P 500. Remember, when you go back and study every bull market over the past 100 years, technology is a leader and outperformer in almost every single one of them. The questions is, how long?
Energy Weakens. Short-term relative weakness suggests continued underperformance for the energy sector. That's OK. Regardless of the environment, there are always stocks that are going down. And we have no problem with opportunities on the short side...
