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The Nasdaq Is Not In A Downtrend

July 1, 2020

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:

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[Premium] Monthly Candle Strategy Session

July 1, 2020

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:

Mystery Chart (06-30-2020)

June 30, 2020

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?

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Last Week In Review (06-28-2020)

June 29, 2020

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."

Navigating the volatility hasn't been easy as even emperors of Industry like Warren Buffet have made some major...

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[Options Premium] Keeping it Close to Home

June 29, 2020

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:

 

 

FMCG Stocks Setting Up For Outperformance

June 29, 2020

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.

Here's the Nifty Fast Moving Consumer Goods (FMCG) Index relative to the Nifty 100 Index pulling back to its breakout level from earlier this year, quickly undercutting it, and quickly reversing. Combine this "failed breakdown" with the fact that momentum is...

Why Crude Poses A Risk To Stocks

June 28, 2020

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.

US Stocks Fail At Major Resistance

June 27, 2020

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:

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Betting On The Best Gamers

June 26, 2020

From the desk of Steve Strazza @Sstrazza

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.

So is this.

The uptrend has definitely gone parabolic. But take a look at the data going back 20-years in the chart insert... we're still a long way off all-time highs in this ratio. We think...