From the desk of Tom Bruni @BruniCharting

The market remains a “hot mess", so we’re looking under the surface at breadth and risk appetite measures to identify clues as to the potential direction that this 15-month range will resolve itself.

Today I want to look at one of those measures, Consumer Discretionary stocks vs Consumer Staples.

If you're a long-only fund manager that believes the market is headed higher, you're going to be in more aggressive areas of the market like Discretionary. If you believe the market is headed lower or isn't going to do much, you're going to be in the lower beta, often higher dividend Consumer Staple stocks.

So what's happening in these sectors right now?

The Equal-Weight Consumer Discretionary vs Equal-Weight Consumer Staples continues to struggle with a flat 200-day moving average and confluence of support/resistance, but just made new 6-month highs this week. While this chart still work to do to confirm an intermediate-term uptrend, this is extremely constructive action and is suggesting that risk appetite among market participants is beginning to pick up.

I've been talking markets with Liz Claman for the better part of the last decade. Whenever I'm in New York, I like to swing by the FOX studios to say hello. This week we discussed the relative strength in Semi's and how I think they will lead stocks and the S&P500 to new all-time highs.

Here is the clip:

In light of DowDuPont's $DWDP recent spinoff of Dow $DOW, it makes the maths a little more complicated on our trade.

Here is the press release from the OCC: https://t.co/QhpJMykSi8 (click the link then launch the pdf)

The short story is this: $DWDP investors are now entitled to one share of $DOW each every 3 shares of DWDP held.

This means that the true value of our options is price of DWDP stock + one third price of DOW stock (approximately).

I'm in New York this week for the annual CMT Association Symposium. I always learn so much at this event, not just from the presentations, but from the attendees themselves. A lot of smart folks in one room is a win for all of us.

Tuesday I was up at the Nasdaq to chat with Catherine Murray about the S&P500, my favorite Semiconductor names and where we are in Canadian Equities and Crude Oil.

Here is the video in full:

In Texas, it's often said: "Go Big or Go Home."

We intend to do just that with a simple options play in a State of Texas namesake.

Last week's Chart of The Week discussed the "One More High" type setup we often see  prior to price consolidations or pullbacks, providing some context around why we continue to remain structurally bullish, but not very aggressive in the short-term.

Friday we got new Monthly Candlesticks, so this post will outline a few of the major changes since last month.

Sean and I have known each other for over a decade but there are still things he's interested in learning about my experiences. In this video, Sean asks me how playing baseball made me a better trader or investor. The key takeaways here are:

1) Hard Work and Mental Toughness

2) Preparation and knowing what you will do under any circumstance

3) Learning how to lose. If you fail 70% of the time on the diamond, you get inducted into the Hall of Fame.

Being able to take a loss and move on is part of the path to success.

The All Star Charts team is not wildly bullish on US stocks here, though the consensus is that eventually we resume higher out of some sideways action that might take a few months to work through. That said, there is one sector we feel will lead us higher when the time is right and we've got a candidate stock that offers us a good opportunity to express our mildly bullish stance while keeping our risks manageable.

From the desk of Tom Bruni @BruniCharting

One of the topics I spoke about during my Chart Summit presentation on breadth last month was the relative performance of Equally-Weighted versus Cap-Weighted Indexes.

I always hear that the market cannot go higher on an absolute basis if the Equally-Weighted S&P 500 is underperforming the Cap-Weighted.

So is that the case? Let's take a look.

From the desk of Tom Bruni @BruniCharting

It's been about three weeks since I wrote this post looking at breadth across various Equity markets since January 2018.

JC wrote a post today about "The Cards We've Been Dealt" which references some of these stats, so I wanted to update some of them and highlight another way we use them to measure breadth.

We have to play the cards we're dealt. Like it or not, this is the environment we're forced to invest in, but only if you want to. You don't have to invest. Cash has been a viable option for 6 months. It's worked out great. Most stocks, sectors, US and International Indexes are still below their January 2018 highs. I can give you the exact numbers like we provide for our Institutional Customers, but just take my word for it. It's not even close. We've been in a 14-month sideways range, or downtrend, depending on who you ask. Either way, it's not an uptrend for most stocks.

Now, this 14-month nothing burger comes within the context of a major bull market in stocks, that arguably started in 2016. After a monster run throughout 2016 and 2017, the stock market, both U.S. and abroad, has consolidated those gains. It seems perfectly normal, and well deserved, if you ask me.