Most of the Equally-Weighted Sector Indexes we track have been underperforming their Cap-Weighted counterparts for the last 16 months, however, we are starting to see some signs that a counter-trend rally in three sectors may be brewing.

From the desk of Tom Bruni @BruniCharting

Last week's Mystery Chart Reveal focused on the rotation into Industrial stocks. In this post I'm going to point out five names in this sector from the S&P 1500 with extremely well-defined risk and skewed reward/risk at current levels.

The Dow Jones Industrial Average is my favorite of all of the stock market indexes. You know how many charts we look at every week at our shop. So with the plethora of price data that comes across my desk, it's really the simplicity of the 30 stocks that represent the Dow that makes me appreciate the index for what it is.

The Dow is a price weighted index where the highest priced stocks represent a larger portion of the index. For this reason, it often gets dismissed in favor of the "broader-based", market cap-weighted S&P500. Some like myself even prefer the Russell3000 index which is really representative of the US Stock market. Funny enough, as different as these indexes may be on paper, that's why they play the game. Here are what the 3 of these things look like in real life. 

Most regular readers of mine know I'm a big fan of the "hundred-dollar-roll."

If you aren't familiar with this phenomenon, essentially, its the tendency for traders and investors to be distracted by a big, sexy, (but ultimately meaningless) round number. And 100 is the most common of the big round numbers that captures the fancy of speculators new and old.

And this phenomenon isn't new. In fact, in Reminiscences of a Stock Operator (the greatest trading book ever written, in my opinion), Jesse Livermore mentions trading stocks as they approach 100, 200, or 300 was one of his favorite strategies as he could very often count on that large number acting as a magnet for buy orders -- which then eventually results in further follow thru for several more points beyond the round number. "There is nothing new on Wall Street," he'd say.

This is all on my mind as a household name and a darling of Wall Street and Main Street emerges from a nice bounce off its 50-day moving average and approaches 100...

Most of the stocks we've liked on the long side have either been stopped out or are well on their way to our upside objectives. While we're remaining patient and think many stocks still need to consolidate their recent gains, that doesn't mean there aren't any opportunities right now.

In this post I'm going to outline the stocks where our risk is very well-defined and reward/risk is skewed in our favor. That way we can participate in any potential upside if the market continues higher, while also limiting our downside should it succumb to the near-term weakness we've been on watch for.

Have you ever heard that the stock market cannot go higher on an absolute basis if the Equally-Weighted S&P 500 is underperforming its Cap-Weighted counterpart. Does this measure of market breadth have any predictive value with respect to market direction? What about the sectors themselves? Well, we've run the numbers and the answer is no!

From the desk of Tom Bruni @BruniCharting

I received a ton of great responses via Twitter and email for this week's Mystery Chart, so thank you for that.

A lot of you were leaning toward the long side, with different approaches and stops. Some were neutral, but none of you were getting short.

From the desk of Tom Bruni @BruniCharting

A few weeks ago I wrote about Shippers, Casinos, and some Construction/HomeBuilding Related stocks being some of the weakest areas of the market. About the message the market would be sending if those stocks couldn't see downside follow-through after breaking down.

So let's check in on those "shitty" stocks.

These are the registration details for the monthly conference call held for Premium Members of All Star Charts. In this call we will discuss the global market environment and how to profit from it. As always, this will include Stocks, Interest Rates, Commodities and Currencies. The video of the call will be archived in the members section to re-watch any time and the PDF of the charts will be made available as well.

This month’s Conference Call will be held on Wednesday April 17th at 7PM ET. Here are the details for the call:

A beauty chart on monthly, weekly, and daily timeframes is setting up just under a major magnet level; there is an an earnings catalyst on the horizon which may goose the action in our favor quickly; and the premiums are relatively cheap for an upside bet. What's more, the company behind the stock offers us a great opportunity to sleep well while we ride out our thesis. What's not to love?

What stock could possibility offer all this?

This week we have a special guest on the podcast: Eddy Elfenbein of Crossing Wall Street and PM for the $CWS Exchange Traded Fund. This is a show about Technical Analysis so I think it's important to also include some of the masters of Fundamental Analysis to tell us how they find charts and technicals helpful in their process. Eddy is one of the original Financial Bloggers and I have a ton of respect for him and his work. He is a pioneer in both social media and portfolio management. I love how he explains his appreciation for Intermarket Analysis and Relative Strength as useful tools throughout his process. As many of you know, these two are near and dear to my heart so it's cool to see the Fundamental community embracing them in similar ways. This was a fun conversation!

Most of the Commodities and Currencies we track continue to lack a long-term trend, but I want to outline a few charts in the space that are notable right now.