U.S. Stock Markets will only be open for a half day tomorrow Monday December 24th for Christmas Eve and closed on Christmas Day. And the following week will follow a similar pattern, being completely closed on Tuesday, January 1.
And the muck in between is no-man's land, especially given the market we're current in as best described by our pal Howard Lindzon: "This is one shitty market."
Unless you've got positions in distress that need defending in this sloppy, bearish tape, it's best to sit on the sidelines and wait until Wall Street gets back to work for real after New Year's Day. As such, we will not be adding any new positions to the All Star Options portfolio this week.
In this post I want to share two charts from the weekend update of our Market Internals workbook, both of which confirm the continued deterioration in breadth as US Stocks make new lows.
Somewhere along the way, a large majority of U.S. citizens convinced themselves that the market owes them something. They think that if they "invest" in the stock market, that they've somehow earned the right to make money over time. I'm not sure if it's the financial advisors feeding them self-serving garbage based on their tiny sample sizes. It could possibly be the financial media constantly making their viewers feel stupid for missing out on a trade or a long-term trend. These vultures use headlines like, "If you had invested $10,000 in X on this specific date you would have easily earned Y in that short period of time". They're proving to us how worthless they are. It's poison.
At what point do investors hold themselves accountable? It's never their fault for losing money. It's the Fed's fault, it's the Trump's fault, it's my neighbors fault who "made" me buy bitcoin.
It's YOUR fault if you lose money. We have no one to blame but ourselves if our "investment" account loses 10%, 20%, 50% or even much worse in the case of things like crypto currencies, precious metals or recent IPOs like Snapchat.
Yesterday after the bell we sent out our Year End '18 ETF Risk Update to our Institutional Clients, covering 100+ of the most actionable and informative charts. To put this report together we examined over 500 inter-market and cross-asset relationships across weekly & daily time-frames to identify trend direction, momentum, risk-management levels, and prices targets.
In this premium post I want to highlight a few charts from each of our five sections: Factors, International, Domestic, Fixed-Income, and Thematic/Niche. If you like what you see and want the full report, you can fill out our Institutional Client Application or contact our Head of Institutional Sales, Jonathan Bloom, for access.
The market is a beautiful thing, particularly the analysis of supply and demand behavior. I'm incredibly fortunate to be a practicing Technician for almost a decade and a half and have become good friends with some of the best that ever did it. I will never take that for granted.
Bonds funds did a good job of getting everyone on the boat leaning one way, only to reverse and slam them in the other direction. The whole world seems to think interest rates have no where to go but up. However, those of us who follow the price of bonds know that reality has been sending us a different message.
The recent failed breakdown in $TLT (the 20-year bonds ETF) is a perfect example
Having Trading Psychologist Dr. Brett Steenbarger on the podcast was a huge treat for me. He works with the best traders on planet earth on a daily basis. Needless to say, when Dr. Brett is telling me something, I want to listen. In this episode, he let me ask him all the questions I was curious about and he happily answered them all with solid advice and relevant anecdotes. We make a lot of mistakes as investors because of our many flaws as humans. When our stress levels are elevated we start acting emotionally, instead of rationally. Taking losses is a difficult task for us, even though we all know that losses are part of the deal. I really enjoyed this conversation and it could have gone on forever if I didn't end it. I hope you get as much value from this chat as I did.
Bonds Funds are breaking out to new 3-month highs. This comes after consensus this September was for higher US rates, and therefore, lower prices for bonds. When the market is leaning too much in any one direction, the unwind of that extreme positioning can be intense. That's what I believe has been happening throughout the 4th quarter.
Here are two charts that show rates could continue lower for some time. The first is a long-term chart of the US 10-year Yield failing to break out above the downtrend in place since 1981:
Coming down the homestretch of 2018 and Mother Market sure is making it interesting. Will a "Santa Claus" rally save global stocks? Or is the Grinch quietly whispering in her ear?
Speaking of the Grinch and classic holiday movies, my family's Netflix consumption has been on the rise this holiday season. But as we know, the stock market is a forward looking mechanism and the outlook as foretold by prices is suggesting that softness is ahead for $NFLX stock.
This being the holiday season and all, you'd be forgiven if you didn't want to put on any new risk heading into the New Year. But for those of us still standing in the ring ready to do battle, $NFLX is streaming a tasty short play opportunity.
These are the registration details for our live monthly conference call for Premium Members of All Star Charts India.
This month’s Conference Call will be held on Tuesday December 22nd at 7PM IST. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since our launch.
