We take a consistent intermarket approach to stocks. Not only do we analyze all the Stock indexes, both domestically and around the globe, but we also compare stocks to other asset classes. This is historically very helpful information to determine the direction of the primary trend for stocks.
Today, we're taking a look at stocks running into major resistance relative to its alternatives. More specifically, stocks are failing relative to both Bonds and Gold.
As you can see in this chart, we saw significant support near this gray shaded area in late 2018 and then once again in August of last year. This "Support" finally gave way and broke in early March, almost 4 months ago. This former "Support" has now turned into "Resistance" throughout June:
When going over some of this week's content ideas with JC, I told him "I can't possibly write another post about Tech stocks, but I want to."
His response was simple: "That's information."
In other words, based on the thousands of US Equities charts I'm looking at each week, the strongest uptrends continue to be in Technology $XLK. The fact that it almost seems too good to be true, or that I feel like I'm beating a dead horse about "tech, tech, and more tech" - is all the more reason to remain bullish.
We can't change the fact that there's a lot of good stuff going on in the space right now. We can only interpret the data in front of us, and right now, it's saying we should keep buying Tech.
Financials are what we're watching very closely this week as a warning of a more substantial stock market correction throughout the summer.
Our strategy has been to buy stocks that are going up. That's worked well. But if you noticed, that has NOT included financials. It's been mostly in the Technology, Internet, Social Media, Biotech & Mobile Payments sectors. That has been our go-to universe during this multi-month rally in stocks.
However, even though we haven't been buying bank stocks, that doesn't mean we just ignore them. Quite the opposite, in fact. If you recall, it was the bank stocks that helped us get so bearish in early February, well before any market crash. We are focused on this group again today for the exact same reasons: Risk Management.
Here is a chart of Financials flirting with that 23 level. That represents the former highs from April. If we're below that, the risk in here is down, and not up:
Outside of India, many major indexes like the S&P 500, have yet to recover above their resistance levels we outlined two weeks ago. With that said, prices have yet to collapse either.
Instead, what we're seeing is prices digesting their gains and setting up for their next move...in whatever direction that may be.
Inside of India, we're seeing the major indices experiencing their first real day of selling after a strong run off of the June 12th lows.
In this post, we're going to provide some perspective on the question many are seemingly asking, "was that it for stocks?"
When it comes to the analysis of Precious Metals, we can make it as simple or as complex as possible. There's no shortage of ratios, risk appetite measures, individual stocks to analyze, etc.
In this post, we're going to take a step back and focus on the assets we're trading rather than all of the other junk.
In the most recent ASC Monthly Conference Call, JC was bullish on Slack Technologies, $WORK. So, it's time to get to work on today's pullback and take advantage of the opportunity to participate at better prices.
Last week, we introduced our new weekly column called "Under The Hood." You can read more about it here.
Basically, we are looking at a universe of the most popular stocks on Robinhood measured by the net increase in accounts holding them week-over-week. Then we're drilling into the charts to find opportunities to either join in and ride the momentum in these names higher, or bet against those that get too frothy.
Here is this week's list. It represents the top 60 stocks that experienced net increases in ownership among Robinhood users last week. We've also included their weekly performance.
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?
Reliance Industries is the largest component of the Nifty 50 at nearly 12% of the index's weighting, so when it moves, we need to pay attention.
The stock has come a long way since its March lows, so we want to take a look at where it's come from and what its recent break to new all-time highs means for its future.
I get asked a lot about Fibonacci and why I use it so often. If by now I haven't made that perfectly obvious, the reason we use it is because it works! Fibonacci levels help us set price targets and, most importantly, manage risk. The market tends to respect these levels, so it would be foolish for us to ignore them.
In our NEW Charting School, I explain exactly how I calculate these levels and walk you through a bunch of real life examples where they helped us over the years. You can watch Lesson 1 here for Free, and then decide if you'd like to continue with the rest of the course.
Today I want to walk you through the process of analyzing shares of Abbott Labs. But first, why Abbott Labs? Why am I interested in this name?
Steve Strazza posted a great piece on a bunch of stocks in the Biotech space that are setting up for some nice runs. And he outlined 6-12 month price targets for all of them, should the move materialize. There are some robust gains to be had here:
As long as price is above its 2015 highs near 134, we don’t want to bet against this breakout. Sure, we’d like to see momentum register an overbought reading and finally confirm these new highs, but price is always the final arbiter of truth… and right now, it’s pointing higher.
From an options trader's perspective, unfortunately there isn't a ton of options volume and open interest in many of these names. This is a bummer.
But have no fear, there's still a smart, risk-defined way to play the space.
Every week we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Despite some volatility in the second half, risk assets continued their steady march higher last week. The broadening participation from Equities was again evident as every major US and Global Index was higher with the exception of Dow Utilities $DJU.
We've written extensively about the strongest areas and those first to reclaim their highs. In this post, we'll highlight a handful of Equity ETFs/Indexes which are at or just beneath fresh highs. Whether these areas work through their overhead supply or get rejected at these key levels will provide important information into the strength and durability of the current rally.
Let's dive right in and take a look at our Sector SPDR ETF table.
