Last night we held our August Monthly Conference Call which our Premium Members can access and rewatch here.
In this post, we’ll share five of the most important charts along with JC’s commentary of them and a brief explanation for each.
1. “This is a downtrend for the Dollar and we’re going to discuss the intermarket implications it has across various asset classes in India and elsewhere.”
Click on chart to enlarge view.
Whether you’re looking at Emerging Market Equities, Base/Precious Metals, or Interest Rates, the direction of the US Dollar Index is a key piece of our analysis. Since June we’ve been looking for a breakdown in the Dollar and in July we got it. With prices now in a confirmed downtrend which needs to be on your radar as a market participant.
2. “Let’s look around the world and I think it’s quite obvious that stocks are not in a downtrend. We are making all-time highs in the S&P Global 100.”
Weekly or monthly charts of diversified indexes like the S&P Global 100 help keep us focused on the long-term trends. Intraday and daily price action creates a lot of noise, but stepping back reminds us that we’re still seeing more global indexes, sectors, and individual stocks moving higher.
As long as breadth continues to expand and prices continue to make higher highs and higher lows, we want to continue erring on the long side of Equities.
3. “It’s a mess. It seems quite obvious, that there are better places to be than Banks.“
The relative weakness in Banks around the world is a headwind right now, which is why our attention is focused elsewhere. Rather than fixate on the one area of the market that’s not working, we’re taking advantage of the many areas that are working and delivering performance. If and when the recent range
4. “Chemical Stocks are making new highs!”
Speaking of areas of strength, one emerging theme we’re taking advantage of is the Chemicals Industry. We created a custom Equally-Weighted Index consisting of the 18 Chemical stocks in the Nifty 500 and it’s making new all-time highs. There are plenty of opportunities in this space and we want to be involved.
5. “For Sobha, the level is 208. It’s been support for 10 years and if we’re above that, the bias is higher towards 400.”
As money continues to rotate into weaker areas like Nifty Realty, we’re finding trade setups like Sobha Ltd., which confirmed a failed breakdown, retested support, and is now moving higher. As long as prices are above 208, the bias is higher towards 400 and the reward/risk is skewed in favor of the bulls.
There are clear trends across various asset classes that we want to continue taking advantage of. If you missed our call which included 165 slides, you can watch the recording here and view our Trade Ideas Page for a summation of the ideas discussed.If you’re not a member and want access to that recording and all of our premium content, start a 30-day risk-free trial. Or sign up for our “Free Chart of the Week” to receive more free research like this.