Traders often joke that there's support at Zero. And then Crude Oil Futures traded negative and we threw everything we thought we knew out the window. Where was that in your model?
Anyway, this is the first thing that comes to mind when I think of the garbage that is, GE.
Next to Wells Fargo, this might be one of the worst companies on earth. It may actually be somehow worse. And by company, I don't care what's going on behind the scenes or who works there. I'm referring specifically to the stock, which is all that matters to us.
We're looking at 2 plots, the price itself going back several decades, and the relative strength (or weakness, in this case), compared to the S&P500. Notice how after the peak in 2000, the next 2 peaks (where US Stocks moved on to new all-time highs), $GE put in lower highs. Also look at the relative strength line breaking to all-time lows:
All Star Charts held its Monthly Conference Call last night, and the overriding theme for U.S. Stocks is: we're likely going higher. And JC shared a bevy of stocks with charts supporting high prices in the near future.
Of course technology is on the radar, and the software sector is offering a wide selection of names to choose from.
Everything in life is relative. In markets, it works the same way.
"How could someone possibly want to own these bonds that pay negative yields"?
Well, what's the alternative? Crashing stocks? Collapsing energy commodities? It's all relative.
In my experience, when assets are in strong uptrends, some might call those "bull markets", they don't just do well on an absolute basis, but they also tend to outperform their alternatives. In the case of stocks, you have Bonds and Gold that are two other very popular places to allocate capital.
The Chart of the Week has to be the Nasdaq 100 breaking out of a multi-year base relative to US Treasury Bonds (Blue Line). I also included the Nasdaq relative to Gold, which has yet to complete this basing period (Black Line):
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
The Top/Down approach to markets is at the core of what we do at All Star Charts. That means starting at the asset class level and peeling back each layer to refine our view of the smaller components that make up that asset class. With each new layer, we discover information that helps us form our weight of the evidence conclusion.
That brings us to our new weekly column, The Top/Down Take, where we hope to educate readers on how we execute this process and highlight its value through the analysis of popular stocks.
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.
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 relative strength trends at play and preview some of the things we're watching in order to profit in the current market environment.
This week, we're going to highlight the continued outperformance from offensive assets as well as the weakness we're starting to see from many defensive assets. This kind of action continues to suggest increasing risk-appetite and is supportive of higher prices within Equity and Commodity Markets.
Welcome to the third edition of “Louis’ Look,” where I walk through the lessons I’ve learned over the past week through interning at All Star Charts. You can read the previous post here.
In this post, I want to step back from the market and focus on people. I really enjoyed writing this one, so buckle in.
As the U.S. continues to deal with the Coronavirus situation, it makes sense that stocks in the healthcare space should be doing well. There's a lot of attention and investment happening here to help deal with the calamity and prevent future spread.
Of course, as traders we don't need to read the headlines to know this. Following price and charts tells us everything we need to know.
One of our favorite names in the space is setting up nicely and it's time for us to get involved.
