The Nifty Metal Index has been dead money for a while, but we are finally starting to see signs of stabilization within the space.
While there aren't a lot of actionable trades right now, we think that rotation into this area is a positive for the broader market and will offer some great setups on the long side in the second half of this year.
For over a decade I've been following the annual Technical Analyst Awards each year when they come out. I get excited when my friends are finalists and even award winners.
I am incredibly proud to announce that Allstarcharts Research is the 2019 Winner for Best Fixed Income Research!
Our work was also chosen as a Finalist in 3 other categories:
We just sent out the Top 10 Charts of The Week Report that goes out to our Institutional Clients every Wednesday morning, and while I may be biased, I really enjoyed putting together week's edition.
We discussed a few market themes as we typically do and then identified several actionable trade ideas on both the weekly and daily timeframes.
With that said, I wanted to share one chart and its caption because I think they sum up the current market environment pretty well.
The technical reasons for remaining bullish US Stocks continue to outnumber the bearish reasons. And there are some stocks already getting started on the next leg higher. Though we are in the bullish camp over here, some elevated caution is necessary.
Today's play is one that takes advantage of a well established trend, yet reduces our cost and has an exit in case an inflection point sending stocks the other way develops.
I was lucky to spend a few weeks in Europe earlier this month meeting with customers, colleagues and old friends. For me it's easy to get up in front of a crowd and talk about the charts that I've been staring at every day for over a decade. I can practically draw them for you at this point. Where I really win is in meeting with investors and traders from completely different cultures both before and after my events. I just got back from a trip to Athens, London, Paris, Amsterdam and Dublin. Between meetings, interviews and presentations, I was able to learn a lot from other investors and gain new perspective on things. That's the point of all this. If we're not going out of our way to learn, then what are we doing?
In this conversation, I sit down with our very own Sean McLaughlin to talk about some of my experiences on the road.
The good news is the S&P 500 and several other large-cap US indexes are back at all-time highs, however, the bad news is there remains a lack of confirmation from breadth and momentum readings around the world.
Needless to say, it was easier to be buying stocks last month than it is today, but let's avoid getting into the weeds and simply look at the number of markets around the world above their 2018 highs.
Below is a table of the global equity markets we track prices in their local currencies. While there are performance stats from several key inflection points like the January 2018 and September highs in the S&P 500, as well as its bottom on December 24th, we want to focus on the left-most "Change From 2018 Highs" column.
This compares the market prices now to where they were at their highest point in 2018, or in other words, it gives us an idea of what the trend is.
Currently, the median stock market in the world is 6.22% off its 2018 high.
There are a lot of interesting charts out there around the world. The current market environment has provided us with a ton of opportunities in multiple asset classes. We've talked about stocks, we discussed commodities, and today I want to focus on the Bond Market. Both Interest Rates and the most liquid exchange traded fund are at critical levels that we need to watch.
Boeing got hit hard in recent months due to trouble with their planes and a grounding of their 737 Max fleet. But here's the real newsflash that we should be paying attention to: Airlines still need new airplanes because humans still want to fly. Of course, we don't really care what the "news" is about stocks we trade. We just follow price and volume action -- both of which are pointing to an opportunity here.
Here is the video from my BNN Bloomberg interview this week. We talk about the implications of a weaker US Dollar, including what that would do to stocks, emerging markets, metals and others. I've been waiting for it all year. But think about it. We've already seen some of the things we would expect to see in a weaker Dollar environment. Gold strong, for example, and an inability for the Euro to go lower. So for me, I think this Dollar fall is just getting started.
A lot of the jokes in my community begin and end with gold bugs. I can't think of any group that has been so wrong for so long. You could have literally been in anything else the past 8 years and made money. It's all good though. What goes around comes around. Gold will have its day again, and I think it could be around the corner.
The US Dollar has been a big focus of ours all year (see here, here and here). The implications of the US Dollar's next move will be felt worldwide. I've been in the camp that the US Dollar Index below 98 is positive for stocks and that a drop in the Dollar will most likely coincide with a rotation into emerging markets and european equities. While the Dollar has remained below 98, it’s been more of a sideways range that anything else. But we may have just seen the beginning of this collapse.
Markets appear to want to move higher. Regardless of our opinions, regardless of our fears, the only thing worth paying attention to is Price. And prices look higher. Heading into summer, let's go on a trip.
