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.

If you look at the stocks that make up the Momentum Index, you'll find Banks, Technology and Consumer Discretionaries. JP Morgan and Bank of America represent over 10% of the index between the two of them. Microsoft, Apple and Nvidia are another 12% together. The top 10 represent over 41% of the Momentum Index according to ...

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.

Here are the details for Tuesday:

This is JC's Playbook to Profit In Q3:

I've been out of town for the past week clearing my head and taking a break from markets. This is one of the most important parts of my entire process. I explained why in this post. While I was away, I peaked at the Internets to see what the twitterati was up to while I was on vacation. Since I was in Hawaii, 6 hours removed from New York City, most of what I read was after market hours. Boy are you guys pessimistic! Do you not see that stocks are in major uptrends? And not just in the U.S. but all over the world? Do you not read anything I write? I could not have laid out the bull case an clearer before I left.

Today I wanted to share with you what I think is one of the more bullish developments we've seen this month: the Russell Micro-cap Index breaking out to a new all-time high. If I have not exhausted this notion enough by now, let me stress: a new all-time high is NOT a characteristic of a downtrend. This is not an opinion. This is simply a fact. Write it down. Tattoo it on your forehead if you have to. Trust me, it took me a long time to finally understand this concept, so don't...

Taking time off regularly has been one of the most rewarding parts of my professional life. This is especially the case in recent years now that I've finally recognized its true value. Besides the obvious fun and relaxing parts about a vacation, it's more about the results of that experience that I'm most concerned with. A lot of us work very hard and we spend an inexplicable amount of time and energy trying to solve the always evolving puzzle that we call the stock market. It's easy for us to get lost in the madness. In fact, as humans, we're built to get lost in it. So it's important to recognize that this flaw exists within us so we may act accordingly to counter that trait as best we can.

The harder we work the easier it is to get stuck in a specific mindset. The deeper we get involved emotionally, in this case over (too much?) time, the harder it is to visualize the environment from the outside looking in. One of the ways that I try and avoid this common mistake is buy cleaning out all of my charts and starting from scratch to rebuild my entire chartbook. Remember, my book consists of well over 3000 charts in total and I run through these religiously on a weekly...

This week was our monthly conference call for Premium Members. We discussed a lot of things, mostly surrounding the fact that stocks are in uptrends all over the world and we are seeing broadening participation among stocks in the United States. Sectors that had been left for dead the past 6 months like Industrials and Materials are now coming up on all of my momentum and relative strength screens. Healthcare and Utilities are also breaking out to new highs. It's not just one sector or a handful of stocks with some stupid acronym. This is a stock market rally that I believe is a lot younger than most people believe.

Today I wanted to share with you one of the things that has stood out to me the most over the past couple of months. It should not be a surprise really because I've been pointing to the way this is setting up since late last year. I think this can really be a monster. I definitely recommend watching the video archive of this month's call. We're talking over 150 slides filled with...

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, June 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.

Here are the details for Tuesday:

The debate that will always persist is the Stocks vs Gold question. Do we own gold? Do we own stocks? Do we own both? What percentage of our portfolio should be in precious metals? Do we own the physical or the ETF? Whether Gold is at new highs or new lows, the questions will keep coming. It's something that us as humans are driven to constantly. I've learned to embrace it. While I treat Gold and the S&P500 the same way I treat Cotton futures and the Egypt30 Stock Index, it's understandable why others don't.

So let's look at it. In which direction should we expect the next 20% - Gold or US Stocks? 

Today we are taking a look at the most important stock sector in the world: Financials. If Financials are leading the stock market higher, it's hard to be bearish equities as an asset class. The first thing we want to do is start from the top with Financials relative to the rest of the market as well as from a long-term perspective. Then we'll take a look at some breadth internals and the sub-sectors that fall within the larger spectrum of Financials, like Regional Banks and Insurance. Once we get structural perspective on Financials as a group, then we'll work our way down to the individual stock level. That's the top/down approach that we incorporate into every sector in the market and country around the world.