In late December I highlighted a few things from a weekend of charting that suggested improving risk appetite in Equities, one of which was a potential bottom in Crude Oil. Today I'm seeing the opposite, so I want to look at the near-term risk Crude Oil poses along with a few other things.
If you're of the mind that the broader stock market is set to top out soon, then it makes sense to start hunting for short selling opportunities amongst the weakest sectors. One sector ripe for this right now is the shipping sector. And one stock in particular is offering a rare opportunity to play the downside with straight long puts.
One of the most valuable parts of my entire process is going through my workbook of Monthly Charts (only) at the end of each month. It's easy to get lost in the day-to-day noise, but this exercise forces us to identify the direction of the primary trend.
During my review, there are always a few of them that stand out. Today I want to point out what’s happening in Americas largest sector. This is a chart of the Technology Index Fund $XLK successfully retesting those March 2000 highs and trying to rip higher:
With a new month comes a fresh batch of Monthly Candlesticks. As you are all well aware, I find this exercise to be incredibly valuable. It forces us to identify the direction of the primary trend.
Today we got new Monthly Candlesticks and while updating the chartbook for our Premium Members, I couldn't help but think the chart below describes the environment we're currently in quite well.
Today we got new Monthly Candlesticks. We wrote a free post on the biggest theme from this month, but this post will go through a few more charts that stood out.
We're headed into another monthly expiration cycle and its time to take some action on open positions with options expiring in March. Not going to sugar coat it -- March positions have been challenging!
Finding things to short on an absolute basis has been tough since December, however, Shipping stocks appear to be presenting an attractive reward/risk for those looking to express a bearish thesis in the market.
Howard Lindzon has always been there for me. He is the founder of Stocktwits, who originally built Allstarcharts.com back in 2010 and welcomed me into their network of bloggers. Many of these are still around today and doing better than ever!
Howard has invested in some of my ventures over the years and I've invested in a few of his. He keeps me posted on developments in the private markets and I keep him up to speed on public markets.