We're back this month with another edition of the Josh & JC show.
This is where I sit down with my boy Josh Brown and talk about the most important Monthly Charts I see around the world.
I love doing this monthly show. Josh and I have been good friends for the better part of the past 2 decades. He knows me really well by now, and I think I've got a pretty good handle on him too, although he certainly finds ways to surprise me quite often.
On this month's show, we take a look at Financials potentially breaking out. One of the leaders is Goldman Sachs, as $GS is now back above its 2007 highs. Meanwhile, Consumer Discretionary is breaking out to new all-time highs relative to Consumer Staples, which is consistent with higher stock prices. But that doesn't mean that Staples can't do well on an absolute basis. And finally, Commodities are breaking out. Crude Oil is back above its 2016 lows. And with all of this bullish talk, what's it going to take to position ourselves more defensively? I lay out the 4 most important signals that we're watching.
The first section dives deep into the US Stock Market and Market breadth, then we discuss the International Markets and specific Factors around the world. Next we go into U.S. Sectors and the best looking Industry Groups. In the second half of the report, we dive into the FICC space (Fixed Income, Commodities & Currencies) and their Intermarket Relationships. Finally we finish up with Cryptos, Options and overall Market Sentiment.
You can skip right to the trade ideas here if you'd like, or give the full report a read!
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.
The weight of the evidence continues to overwhelmingly lie in favor of the bulls.
The major indices are above important levels and are well on their way to achieving our targets. We're seeing sector rotation into offensive, cyclical areas of the market, and away from defensive, which is all confirming these new highs.
Commodities are showing incredible strength in the face of extreme positioning, reflecting the control buyers have in these markets.
While checking out my list of liquid ETFs to get a feel for the markets this morning, it caught my eye that Gold is currently sporting the highest implied volatility (as measured by IVRank). I suppose it is no surprise given the amount of volatility we're seeing in Gold's distant, but currently more popular second cousin, cryptocurrencies.
You'd think Gold would be trading similarly.
However, looking at the daily chart, it appears $GLD is getting stuck in a range bounded by 184 on the upper end and 166 on the lower end.
I only began trading, charting, and researching just a few short years ago - so it's only natural I become victim to some rookie mistakes.
Seeing my trading account up by a decent margin has given me this attitude that I'm some wonder kid, and that I've somehow cracked the puzzle only being a teenager.
But this couldn't be further from the truth.
If this rally has got you thinking you're a superstar, consider that 87%, a near-record high, of the Russell 3000 have outperformed the broader market in the last 3 months. That's right, 87%.
Assuming you've held stocks over this period, statistically speaking, it has actually been more difficult to underperform the S&P 500 than it has been to outperform.
I'm not sure if you noticed, but the MSCI Emerging Markets Index Fund just went out at the highest weekly close in its history.
For you youngsters, this is a big deal.
You see, when I first got in this business, it was the Summer of 2003. Young JC was living in New York City for the first time, downtown in TriBeCa, ready to take on the world.
I was just an intern (envelope stuffer) at the time, at a firm called Merrill Lynch, which later went on to disappear with the likes of Lehman Brothers and Bear Stearns. At that time though, in 2003, this gig was a big deal.
Anyway, for the next 4 years, Emerging Markets AVERAGED A 100% RETURN PER YEAR.
Yes you read that right. My career got started with Emerging Markets being the best place to be on earth. That stuck with me.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
If you are distressed by anything external, the pain is not due to the thing itself, but to your estimate of it; and this you have the power to revoke at any moment.”
The glorified gossip columns and cartoon networks keep proving to be the equivalent of sugar and trans fat packed fast food.
Don't be mentally obese.
Stick to price.
It's better for the portfolio.
It's better for the soul.
It's a Bull Market you know...
I'm not sure if you've noticed, but owning stocks and spending our time looking for stocks to buy has been a much better idea than shorting stocks and spending your time looking for stocks to sell.
It's not even close.
Just think back at all the people who told us to do the opposite every day, every week and every month since the Spring.
This week on the podcast, I'm thrilled to have Jeff Weiss, CMT join me for a really fun chat. If you know Jeff, you already know that he's quite the character. The stories he has from his early days in the 1960s and 70s are awesome. Have you ever heard of a squawk box? How about quote machines that you had to stand in line to use, and would still only get one stock quote at a time?
In this conversation Jeff shares old stories about how he got his first job, cold-calling CEOs of different firms until one of them finally gave him a shot. Even if you're not into Technical Analysis, and you're just a fan of the market, or business in general, this episode is for you.
Make sure to check out Jeff's book: Relationship Investing, named "Best Investment Book of the Year" by the 2018 Stock Trader’s Almanac.
This was a ton of fun. Big shout out to Jeff Weiss for joining me on the show.
When stocks are in strong uptrends, they don't just do well on an absolute basis, but they also tend to outperform their alternatives. We talk about that a lot around here.
Today's chart has to show the Gold Fund breaking down to new all-time lows relative to the Nasdaq, as well as U.S. Treasury Bonds making new all-time relative lows as Interest Rates keep spiking.
Here is that chart showing the Nasdaq breaking out to new highs relative its alternatives:
I'm loving this new Young Aristocrats report the All Star Charts team as recently begun producing. There have been some great ideas here for me in helping my son build a long term investment portfolio of names with both price appreciation potential, but also steady and increasing dividend growth. Sometimes, traders forget this is what stocks are supposed to do!
Of course, while scrolling through the list, one of the names caught my attention for a tactical options trade. You can say I "discovered" this opportunity...
