From the Desk of Kimmy Sokoloff
We saw a nice late-day rally in the market on Friday.
We’re still in the chop zone, and we literally have about 14 Fed speakers this week…
Expert technical analysis of financial markets by JC Parets
by David
From the Desk of Kimmy Sokoloff
We saw a nice late-day rally in the market on Friday.
We’re still in the chop zone, and we literally have about 14 Fed speakers this week…
This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.
by Ian Culley
From the Desk of Ian Culley @IanCulley
Dr. Copper is limping into the close – on pace for its worst week since last November.
The risk-off tone that began earlier in the week is intensifying. Crude oil is turning lower. Gold is pulling back. And the equity indexes are drowning in a sea of red.
But nothing stings stock market bulls quite as badly as the breakdown in copper futures…
From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.
We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
by David
From the Desk of Kimmy Sokoloff
Happy Mother’s Day!
$SPY was unable to hold on to the 412 area. We drifted lower all morning.
From the desk of Steve Strazza @Sstrazza
Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for five to nine years.
We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money.” Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
By adding our technical analysis to the mix, the Young Aristocrat setups give you the opportunity to own the best of the market’s future blue-chip winners before they become must-own household names.
Oftentimes, the strongest performers in this universe and even the Aristocrats themselves pay relatively small dividends. This is usually because the stock appreciation makes it tough to keep up with the payout — even for companies that consistently grow their yield in the double-digits! For this reason, we don’t have a minimum threshold for the dividend. What we’re really doing here is creating a list of quality stocks based on their ability to persistently grow their shareholder return.
And maybe the best part? This list is not just designed for long-term investors. Any kind of investor or trader can use this list as it helps generate ideas across all timeframes, even the short term. Remember, some of the most important filters we use for this list are momentum, relative strength, and proximity to new highs.
I apologize for the victory lap, but there’s an important lesson here…
I’m approaching an exit in one of our better trades over the past year. There is only one week left until May monthly options expiration and I’m holding some deep in-the-money (ITM) calls in $LEN.
This trade started out near Thanksgiving as a bullish Risk Reversal. I sold out-of-the-money (OTM) May 82.50 strike puts on Nov. 23 and used those proceeds to purchase OTM May 92.50 strike calls. The puts were worth a little more than the calls, so the net effect of the trade was to leave me a small 20-cent credit.
I sold half of my calls Dec. 15 and used those proceeds to close all of my short puts. That trade also left with a little credit left over. It also left me holding half of my long calls with a net credit in the trade! This means that I was sitting on a guaranteed winner, with nothing but upside to gain. Sweet!
As you can see from the chart, this trade went on to perform quite well.
But this post isn’t about trade mechanics. It’s about turning off the news and following price.
In an environment where headlines were shouting about rising mortgage interest rates, overpriced homes, declining home purchases, and slowing new home builds, one would be forgiven for not being overly bullish – or even bearish – on home building stocks.
If I based my trading and investing decisions based on the evening news, coming to this conclusion would have been a rational decision.
Thankfully, I only follow price.
When it comes to finance and economics, the media talks about yesterday’s news. Price action tells the story right now. And trends and relative strength offer a hint of the future.
When I pay attention to the latter and ignore the former, good things happen for me. I don’t know any better way to do it.
As a swing trader, missing big winners is a cardinal sin. The math doesn’t work if I don’t capture occasional big wins which more than pay for all the small losses that make up the majority of my trades.
Had I let “news” tint my reading glasses, I likely would not have taken this trade, missing out on one of my biggest winners in more than a year.
Turn off the news.
Trade ’em Well,
Sean McLaughlin
Chief Options Strategist
All Star Charts, Technical Analysis Research
by David
From the Desk of Kimmy Sokoloff
This sideways action in the market is tiring.
We do find setups, but I haven’t been enthused with most of them.