Tyler Wood is a Managing Director at the CMT Association, the global credentialing body for the CMT designation. A Chartered Market Technician (CMT) has achieved the highest education within the discipline of Technical Analysis and is the preeminent designation for practitioners worldwide. I finished up the 3rd Level of the CMT back in 2008, just in time to help me navigate that historic period for the market. I’ve known Tyler for almost 10 years and can tell you first hand that he is regularly speaking with some of the best technicians in the world. I think he brings a unique perspective on the subject and thought he would be a good compliment to a lot of the other guests we’ve had on the podcast. In the episode we touch on the growth of Technical Analysis and the CMT since the late 60s, the role that women have always played in the field and in the organization, the international awareness we’re seeing about Technicals and how social media has changed the access that younger market participants have to market veterans. I really enjoyed this one! [Read more…]
Learning To Lose Is Important
We live in a world where kids get 7th place trophies. It’s embarrassing.
As my friend Phil Pearlman said in one of our recent podcast episodes, “If my kid ever gets one of those, I’ll make him throw it away”.
What’s wrong with taking the loss, learning to live with it, and then moving on?
In October, Dr. Brett Steenbarger shared some of his thoughts with us on visualizing yourself taking the loss, before even entering into an investment. Already going through that “pain” in your head makes the loss easier to accept in the future if/when we are wrong.
Last month I put out a post called, The Market Owes you Nothing, so we remember that indeed, the market does not owe us a single thing. Financial Advisors put that compound interest chart in front of investors like a carrot, and then investors get upset when the market is not going up. The better chart is the one showing the massive draw downs in stocks over the past century. We see 10% and 20% corrections all the time and sometimes even 50%. That’s the chart that needs to be dangled in front investors like a stick, rather than a carrot. But that one doesn’t help raise assets 😉
In Dr. Daniel Crosby’s new book, The Behavioral Investor, he brings up the topic of loss aversion in both markets and life. This weekend, he said this is his favorite paragraph in the book: [Read more…]
[Options Premium] Leaders Gotta Lead
If the worst is over for the stock market, then definitely one of the areas we want to be getting long is the medical devices sector. There are a lot of stocks here that have shown relative strength and are at or near all-time highs. If US stocks go higher from here, this sector will definitely lead the way. [Read more…]
Medical Equipment: New All-Time Relative Highs
You know what is not a characteristic of a downtrend? All-time highs!
Friday afternoon, the Medical Equipment Index went out at new all-time weekly closing highs relative to the S&P500. We look to relative strength as a leading or coincident indicator for stocks. This sector’s behavior is no different. [Read more…]
[Premium] Medical Devices Are Breaking Out
There is a reason why Medical Equipment stocks look like Tech stocks and not the rest of Healthcare. They’re essentially tech stocks trapped in the body of a healthcare stock. Although they are indeed in the Healthcare space, we need to recognize how they behave, the relative strength vs their peers and then treat them as their own group.
In case you missed it, Medical Equipment stocks went out yesterday at their highest weekly close relative to the S&P500 EVER. This is not evidence of a downtrend or any kind of weakness. Quite the opposite in fact: [Read more…]
[Options Premium] Brazilian Breakout
We’re about five weeks out from the start of Carnival in Rio de Janeiro, but the Brazilian stock market ETF $EWZ looks like it wants to get a head start on the party. And its one of the few places in the Western hemisphere pricing in muted volatility. This sets up a nice opportunity. [Read more…]
Chart Of The Week: Dow Theory 2019
When you hear people talking about Dow Theory, it usually revolves around what the Dow Industrials and Transports are doing and whether they are diverging or confirming one another. I want to be perfectly clear that while this is certainly one of Charles Dow’s tenets from the late 1800s, this is just one of many, and not even in the top 5, as far as I’m concerned. I encourage you to check out my post: Everything About Dow Theory.
Today, we are indeed going to focus on the behavior of the Dow Jones Industrial Average and Dow Jones Transportation Average. Earlier this week we discussed the Dow Jones Composite, which includes the 15 stocks in the Dow Utility Index as well. For this conversation we’re analyzing just the Industrials and Transports. [Read more…]
Why These 10 Stocks Matter
From the desk of Tom Bruni @BruniCharting
Tuesday I posted a mystery chart and asked you all to let me know what you would do. Buy, sell, or do nothing. Most of you said you’d be short or doing nothing until the range resolves lower, while only one or two of you said you’d be long with a tight stop or were waiting for an upside break.
Given how closely this chart resembles the S&P 500 or other major US Indexes, I wasn’t surprised by those responses. It still feels like many people have a short bias, so continued churn at current levels or a slow grind higher could leave a lot of people left behind.
Anyway, here’s the actual chart and why I feel it’s relevant.
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