From the desk of Tom Bruni @BruniCharting

Every time the stock market rallies over any significant period, we're bound to see the "most shorted stocks" chart come out of the woodwork with an ominous caption like "presented without comment" or "this is the top". Besides the fact that presented without comment is a comment in and of itself, the presenter very rarely tells us the methodology behind the chart's construction, leaving us with more questions than answers.

Last week, Tom Bruni penned a post titled Global ETF Carnage Continues, highlighting how ETFs representing stock markets around the world have been getting hurt by US Dollar strength. While he isn't yet calling a bottom, there was one particular Latin American ETF that was beginning to show signs of bottoming and it is a scenario he'd like to see replicated in more global ETFs to give him confidence the turn is coming.

The best way I know how to stay engaged in this possible turn is to have some skin in the game.

05/01/2019 UPDATE:

As a result of the labor intensive process needed to maintain the Chartbook Notes and their lack of use by the majority of members, we have decided to discontinue this feature. We will be adding new tools and functionality to replace it by the end of the quarter. In the meantime if any of the charts in the Chartbook are unclear and you need further clarification, please feel free to contact us and we'll get back to you within 24 hours. Thank you in advance for your patience as we make these improvements to the site.

Over the last few weeks we've been making several changes to the site and will be adding more stuff over the coming weeks based on your feedback. One of the changes we've made is the notes in our Chartbooks. We've received several questions on how to interpret them, so today I want to use this post to quickly walk you through just that.

One of the most valuable parts of our research process in the US is our multi-timeframe analysis of the Dow 30 components. By analyzing 30 of the largest companies in the US markets we can quickly gain an understanding of the index's underlying trend and which sectors are showing relative strength and which are showing relative weakness.

In India, we perform the same exercise with the Nifty 50 and Nifty Next 50. Over the last few months we've pointed out the weakness in mid and small-cap stocks, but more recently our analysis of the individual stocks within the large-cap indexes has started to suggest that this weakness may be spreading. Yesterday we talked about weak stocks in the Nifty 50, so today we're going to perform the same exercise with the Nifty Next 50.

From the desk of Tom Bruni @BruniCharting

Last month we wrote about short opportunities in GBP/JPY and AUD/JPY that took some time to develop, but are finally starting to work. Today we're going to focus on the US Dollar as the Dollar Index is up roughly 8% since bottoming on February 15th, and even moreso against many currencies not represented in the index. While the Dollar Index may be extended a bit in the short-term, there have been several moves that look like the start of long-term trends that we want to be a part of.

If you're like me, you think ATM charges are a crime. And one of the worst offenders is Chase, part of JP Morgan's umbrella. It's time we make them pay us back for all the ATM fees they've stolen from us for the privilege of having access to OUR money.

It just so happens, I see a great opportunity shaping up to make some high probability cash flow to replenish our bank account balances.

One of the most valuable parts of our research process in the US is our multi-timeframe analysis of the Dow 30 components. By analyzing 30 of the largest companies in the US markets we can quickly gain an understanding of the index's underlying trend and which sectors are showing relative strength and which are showing relative weakness.

In India, we perform the same exercise with the Nifty 50. Over the last few months we've pointed out the weakness in mid and small-cap stocks, but more recently our analysis of the individual stocks within the Nifty 50 has started to suggest that this weakness may be spreading to large-caps. Within this post I want to point out a few of the names in the Nifty 50 that have us concerned about the performance of the index and may even be offering opportunities on the short side.

Over the last two months the Rupee has rallied against several of the most widely traded currencies in the world, including the US Dollar, Euro, British Pound, Yen, and Australian Dollar. With that said, the Rupee's rally versus the US Dollar was short lived and the pair is now back toward 2.5-year lows, suggesting it remains vulnerable and that further weakness may be ahead.

From the desk of Tom Bruni @BruniCharting

Dollar strength has wreaked havoc on the group of ETFs that many people use to gain exposure to global equity markets. One downside of many of these ETFs is that they own the assets of the country they represent in their local currency, and since the vehicle is unhedged, changes in the exchange rate play an important role in their pricing. The Dollar Index has rallied roughly 8% since its February lows, and more dramatically against many emerging and developed market currencies not represented in the Dollar Index, which has exacerbated many of the price declines we've seen in this group of stocks.

AMD has had a tremendous run off this April's lows, where it bottomed out around $9.00. Today, it's trading north of $16. That's a greater than 75% move in about 11 weeks. Wow.

But we have some very important technical and supply-and-demand reasons to believe the move might only just be getting underway. And we want to participate, but limit our risk in doing so.

From the desk of Tom Bruni @BruniCharting

In early April I tweeted about AMD's potential breakdown from its 15-month bull-flag and its potential implications for the stock. In hindsight I'm glad I did because it's great to have this real-time example of my mindset, and the mindset of others in the marketplace, as the pattern played out. It was also a great opportunity to get constructive feedback in the comments section from many of the bulls at the time. Now that I've used my one joke per post allowance, let's move onto how the stock has performed since.

The Nifty Energy Index is hitting 2.5-month highs relative to the Nifty 500, lead by Reliance Industries Ltd. which makes up 50% of the index and is making all-time highs. With a component making up that large a percentage of the index, it's inevitable that strength, or in this case weakness, of the other holdings may be masked by the overbearing influence of one stock.