In this episode I asked my friend Ryan Detrick to come talk about the quantitative work he does as part of the technical analysis he provides for advisors at LPL Financial. I have been following his work for years and have gotten to know Ryan well during that time. I was really looking forward to this conversation and it exceeded all of my expectations. Ryan does an excellent job of using basic mathematics to debunk popular myths told to investors about the market. We discuss the impact of a rising rate environment on U.S. stocks, the Yield Curve, Stock Market Seasonality and some of the things he is currently seeing in the market. This is a can’t-miss episode! [Read more…]
[Premium] Monthly Conference Call Video Recording September 2018
This is the video recording of the September 2018 Conference Call. After reviewing approximately 5000 charts from all over the world, these are my conclusions.
First of all, there are exponentially more bullish looking stocks than bearish ones. This goes for both U.S. Stocks and those from all over the world. The Credit Markets are confirming this bullish outlook for stocks with risk appetite coming from the largest market in the world.
There are plenty of opportunities to make money this quarter and I tried my best to lay them out in an easy to follow process. Here is the video in full: [Read more…]
[Options Premium] A Shiny High Probability Trade
Casual readers of All Star Charts will notice we’ve been warming up to the idea of being bullish Precious Metals and Miners for a turn. Check these recent posts to get up-to-date on our thoughts:
Defining Our Risk in Precious Metals (Sept 13)
Is the Market Ready for a US Dollar Collapse? (Sept 18)
If you’re a believer that a short-term bottom is in for Gold Miners, I think a nice short-term, high-probability trade with a clearly defined risk level has presented itself in the Junior Gold Miners ETF $GDXJ. This isn’t a sexy play, but it helps diversify our portfolio a little bit by getting us short premium in a high probability (not a guarantee) set up with a good chance of turning us a profit. [Read more…]
[Chart of the Week] Is The Market Ready For A US Dollar Collapse?
We’re always focused on positioning. Stocks don’t go up because of some article written by a 26 year old journalist who has never made a trade in her life. Stocks move based on positioning from institutions. When the market is caught leaning the wrong way, the unwind can create spectacular moves. This is the key to the market: positioning, not the noisy media.
As many of you know, every single day I look for risk vs reward opportunities that are skewed in our favor. We’re not here to be right, we’re only here to make money. There is a big difference between the two. In other words, we don’t care if we get it wrong. We just want to make sure that when we are right, that we’re really really right. Isolating asymmetric risk vs reward opportunities is how we do that, and I believe we do it very well.
I really don’t think this market is ready for the US Dollar to collapse. We’ve had a monster rally in the Greenback all year and emerging markets and precious metals have felt the pain. I believe that’s about to change dramatically. [Read more…]
[Options Premium] Hit ’em Low, Ride ’em High.
Continuing with a theme I discussed coming out of Labor Day Weekend, volatilities continue to remain low across major stock indices, within the majority of sectors, and by extension many key stocks. Until that changes, there’s no need to deviate from my current plan of keeping things simple. When bullish opportunities present themselves, it is pretty simple — I want to be long calls. There’s no need to overthink things here.
Not surprising, there is a stock on our radar that it is breaking out to all-time highs with options pricing in volatility near the lowest levels seen in the past year. A perfect candidate for straight naked calls. [Read more…]
Bonds Could Be The Catalyst To Take Stocks Much Higher
There are tiny little irrelevant markets everywhere like Pot stocks and Crypto Currency. These could disappear tomorrow and it won’t matter. The sovereign wealth funds, hedge funds and other monster institutions that make markets move have to be in the bond market. They’re too big not to. So if you want an inside look at the money flow from one place to another, an intermarket approach really helps.
I’ve been a lonely stock market bull for most of this year. It feels like every time I’ve told people that I think we’re closer to the beginning of a bull market than the end, they think I’m crazy. That reaction has gotten me even more bullish. Not only does price continue to suggest we’re heading much higher, but sentiment and positioning points towards the same.
I’ve made the argument that Technology is going to take us much higher, as it is just now finally breaking out above the March 2000 highs. It took 17 years to digest those 1990s gains. We’re now just moving on. All that market cap getting going is one obvious catalyst that I’ve been talking about since last year.
Another big one has to be the bond market. If interest rates get going, selling in bonds is likely to continue. That money needs a home. Stocks and commodities are likely it. First, let’s see what rates themselves are signaling before making plans on what to do. Here is the U.S. 10-year yield. This month marks the 37th anniversary of the high in rates in 1981, about 5 months before I was born. I’ve known nothing but rising bond prices and falling interest rates: [Read more…]
Why Are You Here? Lessons From Wine Smelling Class
I started taking wine a little more seriously over the past couple of years. It’s been fun to learn about different varietals and the countries that grow them best. The geography is really interesting and it’s fun to go visit places like Tuscany and Bordeaux. The whole process has been rewarding in a lot of ways. When you’re at a nice restaurant, for example, you want to make sure you choose the best wine that’s going to work best with your meal for your specific palate at your individual price point. Being able to explain your preferences and have an intelligent conversation with the Sommelier helps you do that.
When I first started studying wine I quickly realized how many similarities there were between the wine world and trading. It’s crazy. The Court of Master Sommeliers developed what they call the Deductive Method. What you’re essentially doing is taking into account all of the characteristics being displayed and eliminating possibilities along the way. So for example, if the wine is white, you know it’s not a Cabernet Sauvignon or Pinot Noir. Then you smell it and taste it to further eliminate other varietals and work your way down from there. When we look at markets, if the stock is making new all-time highs, we know it’s not in a downtrend. Then we look at each sector’s momentum and relative Strength characteristics to further eliminate the weaker sectors from being potential suitors until we ultimately find the strongest stocks within the strongest sectors.
Sommeliers consider the color of the wine, the smell, the body, the flavors and a history of wine making to come up with a guess of what the wine could be and where it’s from. At our shop, we identify market trends, use momentum, relative strength, intermarket analysis and a history of market trading patterns to isolate a specific investment opportunity. Traders and Sommeliers are weighing all of the evidence knowing full well that it is based on incomplete information. We trust the process.
One of the weaker parts of my wine game is smell. It’s really hard for me to get those notes of grapefruit or freshly cut grass, for example, while it appears seamless for others. My fiancee in particular is really good at this part and it totally frustrates me. So last week I took a Wine Aromas class at the Napa Valley Wine Academy. I was really excited to learn how to smell better but the experience really just reiterated how bad I am at this part of the wine tasting process. [Read more…]
[Premium] Details For September 2018 Conference Call
This is the monthly conference call for Premium Members of All Star Charts. In this call we will discuss the global market environment and how to profit from it. As always, this will include Stocks, Interest Rates, Commodities and Currencies. The video of the call will be archived in the members section to re-watch any time and the PDF of the charts will be made available as well.
This month’s Conference Call will be held on Wednesday September 19th at 7PM ET. Here are the details for the call: [Read more…]
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