Have you heard that story yet about how Amazon is destroying traditional retailers?
Let me ask you: Is this actually the case? Is this it for retailers? It's over?
Fortunately we have actual data that can help us answer this question. We're not making guesses based on estimates that will be revised multiple times over the next few quarters. As Technicians we know what is actually taking place between the buyers and sellers for these stocks. It's up to us to make the correct interpretations, of course, but that price data is the only reliable data in existence when it comes to retail stocks.
This is the infamous chart of the S&P Retail Index, which is equally weighted. So remember that in this index, Amazon does not represent a large percentage of the overall weighting. Each retail stock, about 94 of them, are weighted approximately the same across the board.
Have you heard that story yet about how Amazon is destroying traditional retailers?
Let me ask you: Is this actually the case? Is this it for retailers? It's over?
Fortunately we have actual data that can help us answer this question. We're not making guesses based on estimates that will be revised 20 times over the next few quarters. As Technicians we know what is actually taking place between the buyers and sellers for these stocks. It's up to us to make the correct interpretations, of course, but that price data is the only reliable data in existence when it comes to retail stocks.
This is the infamous chart of the S&P Retail Index, which is equally weighted. So in this chart, Amazon does not represent a large percentage of the index. Each retail stock, about 94 of them, are weighted approximately the same across the board.
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, July 20th at 7 PM 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.
Every month I host a conference call for All Star Charts Premium Members where we discuss ongoing themes throughout the global marketplace as well as changes in trends where new positions would be most appropriate. This includes U.S. Stocks & Sectors, International Stock Indexes, Commodities, Currencies and Interest Rate Markets.
We've been bullish towards US and Global Stocks once again since May. I still think this is an environment where we need to be buying weakness in stocks, not selling strength. The weight of the evidence is still pointing to an increased amount of risk appetite, not risk aversion. What we're seeing in the bond market, however, is suggesting interest rates are still heading higher. The implications here for assets like Gold, Silver, Crude Oil and the US Dollar is also important to recognize.
I'll do my best to lay out my weight of the evidence conclusions and walk you step by step with how I got there! This month's Conference Call will be held on Wednesday July 19th at 7PM ET. Here are the Registration Details:
Chemical stocks are breaking out to all-time highs. It's not just one or two of them either, they are doing this collectively as a unit. When we see broad-based participation out of a group, it's not something we want to ignore. Today I want to smooth things out and look at this group from an Equally-weighted basis. While monster stocks like Dow Chemical and Du Pont break out to new all-time highs, the question we want to ask is whether or not it's just them or are the rest of them joining along?
With Chemical Stocks breaking out to all-time highs, I can't think of a better time than now to do a deep dive analysis on what is going on in the space. You guys know how much I've liked the Chemicals for a while now. This has been a monster since early last year and then picked up again after last summer.
When we talk about the Materials Sector, Chemicals aren't exactly the first thing that might come to mind. But if you dig deep into the Materials space, it is clear that the Chemicals are the leadership sub-group within the broader sector. Today we're going to dive in and see what is really going on here.
Today we're going to focus on what is taking place specifically in the Consumer Discretionary space. This is one of the largest sectors in the S&P500 with respects to the number of components, but the differences between all of the stocks in the group really stand out. While we are seeing some strength in Online Retail and some of the Homebuilders, the Apparel and Traditional Retailer space look terrible. So we don't just want to be buying this sector blindly. I think we need to pick and choose our spots.
In this report I wanted to do a deeper dive into Consumer Discretionary to try and determine the direction of the next major moves and how to best take advantage of it:
For over a decade I lived in New York City and had the opportunity to eat and drink very well. It’s hard not to in that town. Throughout the years I had clients who invited me to great restaurants where we had amazing food and drank awesome wine. Many other times it’s been dinner with fellow market participants or family and friends. While I was easily able to appreciate the high-quality plates put in front of me, the wine that went with it was usually more of a mystery for me.
They would ask me, “JC do you like the wine?” And while I almost always did, I could never explain why. Yes, I liked it. Or no I didn't like it. That was the extent of my wine knowledge. Sure I’ve traveled to Bordeaux and Tuscany over the years but I still couldn't tell you why I liked or disliked a wine.
If you told the average market participant that momentum stocks outperformed this week and are in the process of breaking out relative to the overall market, they would say you're crazy. But for those of us who ignore the gossip columns and instead focus on price, this should come as no surprise. Sure, some of the mega-cap names have corrected a bit since last month, but they still all fall within the context of much bigger uptrends. The term "Momentum stock", on the other hand, is thrown around way too lightly, in my opinion. So rather than make up definitions for them, we'll just use the stocks that make up the MSCI USA Momentum Index (we like to use common sense here). If you compare this index to the S&P500, Momentum names are attempting to break out to new all-time highs.
Register here for our live monthly conference call for Premium Members of All Star Charts India.
July's Strategy Session will be held on Wednesday, July 7th at 7 PM IST. As always, if you cannot make the call live, the video and slides will be archived and published here along with all of our past conference calls.
