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?

This is the video recording of the April 2020 Conference Call for Members of All Star Options

Interest Rates continue to stabilize in the US and globally, setting the stage for rotation into several beaten-down areas of the Equity market...particularly in small banks.

This was a risk to our near-term bearish thesis and suggests the major indexes could push marginally higher in the very short-term. And while we ultimately believe further weakness is ahead over the intermediate-term, we have to acknowledge and monitor this rotation under the surface to see how it develops.

Several stocks we're watching could benefit from this "dash for trash" trading environment taking place in the market. Not only are they attractive reward/risk opportunities on their own, but more importantly, how they perform will provide important information about risk appetite and the potential for the market to extend further to the upside. It's the same reason we were monitoring Autos and Media earlier in the month.

The idea is that if market participants are buying these very beaten-up stocks, then the world is...

The Nifty IT Index remains subdued due to weakness in its largest components, like Tata Consultancy, but under the surface, there's been leaders like Info Edge (Naukri) trending well on an absolute or relative basis.

With that said, several charts are suggesting this leader may be transitioning into a laggard.

Let's take a look at the chart that sparked this thesis.

Below is a weekly chart of Info Edge (Naukri) relative to the Nifty Next 50. Since its breakout to new all-time highs in early 2014, we've seen the Fibonacci Extensions from its 2008-2009 base serve as solid support/resistance levels. Recently, prices hit our fourth upside objective at the 423.6% extension near 0.1056 and have not exceeded it yet.

Click on chart to enlarge view. 

This also comes as momentum diverges negatively from price by making lower highs as prices make higher...

It would seem that the "new" economy we live in -- one where we order everything online for fear of walking into stores -- would benefit the companies that provide the infrastructure and transportation to make that happen. Fundamentally, that makes sense. But we're chart readers here, and the charts are telling us something different.

Did you notice how Stocks, Bonds and Gold are all at or near 34-day highs?

Here is an update to our Bull Market Checklist of 20 Items.

*Note: The Sensitivity column represents how close the asset is to the risk level in question

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, April 24, 2020:

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

This week we want to highlight the continued divergence between Energy stocks and Oil using our Sector and Industry ETF and Commodity tables.

First, let's look at some of the longer-term leaders. Biotechs (IBB) just broke out to fresh multi-year highs and are one of the top performers on our Industry ETF list across all timeframes.

Aside from Gold Miners (GDX), they are the only industry on our expanded list of over 50 ETFs already back at fresh 52-week highs. Definitely some relative strength worth paying attention to in these areas.

Be sure to read our recent post on Gold Miners.

This week we saw a huge gain from not only the strongest Industry ETF over the trailing year (GDX) but also the weakest, as...

The Nifty Financial Services Index continues to show relative weakness.

In this post, we're going to update our risk management levels, targets, and discuss the components within the index that are showing the most relative strength and weakness.

When analyzing the Gold Mining Sector, I can't help but think about the 1993 movie Dazed & Confused. One of the more popular lines in the film is the perfect way to explain what is currently happening in today's market.

In this scene Matthew McConaughey's character is telling a couple of kids,

You heard about the party being busted right? Not to worry. There is a new fiesta in the making as we speak. It's at the moon tower. Full kegs. Everybody's gonna be there. You oughta go...."

The guys at ASC are out with a piece this week highlighting the weakness under the hood in some of the biggest sectors in the US Stock Market. Read it here.

One of the poster children for weakness we want to get short ahead of another possible leg down is setting up right now.