As July gets under way, it’s time to review positions with July options that remain open (haven’t already hit profit targets or been stopped out).

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

From the desk of Steve Strazza @Sstrazza.

What's with all this talk about weak breadth lately?

A lot of market participants have been pointing out the divergences or lower highs in popular breadth indicators such as the percent of S&P 500 stocks at new 52-week highs or the percent above their 200-day moving average.

In many cases, these actually aren't divergences at all as the S&P is yet to make a new year-to-date high itself.

Just like we look at different breadth indicators to identify market tops than the ones we look at to signal bottoms, we should use different items in our breadth toolkit depending on the market environment we're in.

Using the current rally as an example, it makes little sense to give weight to the percent of stocks making new 52-week highs considering most indexes and sectors haven't been able to achieve the same.

What do we know about all-time highs? We know we don't usually see them happen in downtrends. As obvious as this might seem to some, you'd be surprised how many people don't realize that new all-time highs are a classic characteristic of uptrends.

I encourage you to go back and study the greatest uptrends of all-time. Along the way, do you see new lows being made? Or do you see a lot of new highs in those uptrends?

Well, here is the Nasdaq Composite closing at new all-time highs for the second consecutive month. I've done the work, these are things we usually find in uptrends:

It's my favorite time of the month! We have a fresh batch of Monthly Candles to analyze, help us identify trends and find profitable ideas. It takes me no more than 30-60 minutes and I only have to do this exercise once each month. That's just 12 times a year and BY FAR the most valuable 6-12 hours of work I put in each year, and it's not even close!

I'd like to invite you to join be this evening for a live Strategy Session. We'll be going through all the most important Monthly Charts and talk about what we want to do as we enter the 3rd quarter!

I will be hosting this Live Call tonight, Wednesday July 1 @ 7PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with all the other live calls since 2015.

Here are the details for tonight:

From the desk of Steve Strazza @Sstrazza

New Mystery Chart!

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?

Yesterday we discussed our thesis for the Nifty FMCG Index to move higher on a relative basis.

Another sector we've been keeping an eye on is Technology, which has been unable to break out to new relative highs.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, June 26, 2020:

Every week we publish performance tables for a variety of different asset classes and categories along with commentary on each.

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness."

It sounds like Charles Dickens could have been writing about today's market in his famous passage from A Tale of Two Cities.

Many areas of Growth and Technology are trading at or near record highs, and it's sure felt like the "best of times" for anyone who's been overweight these stocks in recent years.

On the other hand, cyclicals and Value were already hurting coming into the year and then endured serious structural damage during the Q1 crash. If you've been invested in these areas, particularly those groups directly impacted by Covid-19, it might just seem like the "worst of times."

Well, since we're all stuck at home for the foreseeable future, we might as well spend some money on making "home" the best we can make it. Those long dormant "some day" projects that have been rattling around our brains all seem to be taking on a smidge more importance these days.

Americans seem to be getting back to work -- at home, ON the home. The chart of Home Depot $HD share price certainly bares this out as we're currently hanging out at levels above the pre-coronavirus selloff:

In this post, we're putting aside our broader market thesis that we've outlined (June 28th, June 27th, and June 24th) and focus on a specific sector that may be presenting opportunity on a relative basis.

A few weeks ago we highlighted the Nifty Services Index, but this week we're taking a similar approach and thesis towards the broader Nifty Fast Moving Consumer Goods Index.

Let's get into it.

From the desk of Tom Bruni @BruniCharting

We continue to focus on buying the strongest stocks, but we're also always playing devil's advocate by identifying risks to the bull thesis.

Two weeks ago, I outlined the "Island Reversals" and other areas of resistance in many global indices. Today, most of these indices are still stuck below those levels and instead are pushing towards multi-week lows.

Last week we looked at the weakness of US Financials on an absolute and relative basis and the S&P 500 failing to exceed resistance relative to two of its most liquid alternatives, US Treasury Bonds and Gold.

Today, I want to look at Crude Oil and why I'm adding it to our list of risks to the Equity bull case.

This post is a follow-on to our weekly Five Bull Market Barometers update, as there are specific risks to stocks worth highlighting as we head into July.

In early May we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.

If you haven't read our initial post linked above, we'd encourage you to check it out so you understand what the rationale behind these five indicators is.

Now, let's see where we ended this week.