When the major U.S. Stock market indexes are making new highs, you want to see the list of stocks making new highs increasing along the way as well. This had certainly been the case throughout February and March, but has come to a complete halt this month. Looking across the board, the S&P500, Dow Jones Industrial Average, Nasdaq 100, Russell 2000, Mid-cap 400, etc have all made new recovery highs over the past couple of weeks, since our epic bottom in late January/early February. The problem is that 1) all of our upside targets have now been achieved where we wanted to take profits and 2) breadth in the market now stinks.

Utilities have been the monster in the U.S. Stock Market this year. While some sectors, like in the metals or energy space, have bounced back from horrific downtrends, others have kind of just muddled around, like Financials for example. Utilities, on the other hand, have been an absolute beast. They've been rallying since the beginning of the year and this month hit new all-time highs. Moving forward, I think the risk vs reward in this sector favors the bears.

Here is a chart of the S&P Utilities Sector Index rallying this year to get back up towards its early 2015 highs. Meanwhile, at the new all-time highs this month, momentum, as defined by a 14-week relative strength index, put in a lower high. This bearish divergence and failure to hold on to those all-time highs should be the catalyst to send share prices in utilities tumbling in the coming months:

I think a really important concept that too often gets overlooked is the power of keeping an open mind. Why must we stick to a bearish or bullish stance? What is wrong with neutral sometimes? Just because our upside get hit, does that mean we need to flip bearish and start shorting everything? I don't think so. I much prefer taking profits when objectives get achieved and then reevaluating once we get more price data. We don't know what is going to happen tomorrow or next week or next month. No one does. So let's appreciate the fact that the future is unknown and therefore all possibilities should be considered.

Today's Chart of the Week represents what I consider to be part of the bullish case for the S&P500 in 2016. I'm not ready to pound the table bullish, or bearish for that matter, but if this one plays out the way it looks, I would argue that it's a giant feather in the hat for the bulls. This is the mystery chart that I tweeted out yesterday, for those of you who have been asking.

Once a week I do my Global Macro review where I annotate and take notes on every country's index around the world. This analysis is on multiple timeframes so we focus on both the weekly timeframe going back 7-10 years and the daily timeframe over the past 6-12 months. The weekly charts are designed to get structural perspective while the daily timeframes are more for short-term to intermediate-term execution.

In this week's analysis, Brazil stands out as it gets back above the late 2008 lows. Over the short-term, Brazil has been a favorite long of ours since it first got back above the September lows. There was a major theme among global stock indexes, particularly in Latin America, where prices were getting back above previous lows in late January and early February. We saw a monster move higher in Brazil since then, as we did in Peru, Chile, Colombia, Mexico, etc:

There’s an old Japanese proverb that says,

If you wish to know the road, inquire of those who have traveled it

Technical Analysis is relatively new to us in the Western world. Charlie Dow originally wrote down his principles towards the end of the 1800s. But technical analysis can be traced all the way back to early 18th Century Japan when the Dōjima Rice Exchange began to issue and accept rice warehouse receipts. These rice receipts were essentially the first futures contracts ever traded. My man Munehisa Homma originally started trading at his local rice exchange in the port city of Sakata. This is why you frequently come across the “Sakata Rules” regarding Japanese Candlesticks. After Homma dominated his local markets, he went to trade in what today we call Tokyo. In order to learn about the psychology of investors, Homma analyzed prices on the rice exchanges going back to the 1600s.

This week I was over at the Nasdaq in Times Square discussing the current market environment with Frances Horodelski on Canada's Business News Network. The weight of the evidence is suggesting a cautious stance up here after all of our upside targets have been hit in recent weeks. Remember, we've been bullish stocks, globally since late January, and in the U.S. since early February. When our upside objectives are hit, it's time to reevaluate. That's what we're doing now.

Every month I host a conference call for All Star Charts 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.

This month's Conference Call will be held on Wednesday April 13, 2016 at 7PM ET.

In this month's premium members conference call, we will discuss the following topics:

- How Low Can U.S. Stocks Go From Up Here??

- A Few Non-correlated Trades to Add To Your Portfolio

- What Is The Best Trade In Precious Metals Today?

- How Do We Trade Crude Oil Now?

- What Does The Behavior of Financials Say About Risk-Appetite

- Ags Can Be A Monster, But How High Can They Go?

As always, we'll leave as much time for Q&A as possible.

Here are the Registration Details:

From the desk of Thomas Bruni @BruniCharting

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The weight of the evidence has been building in favor of the bears over the last week or two, making the US equity weakness this week anything but surprising. Throughout the duration of this post I'll outline the evidence that I've been noticing over the last two weeks and what it means for us as market participants moving forward.

Yen Strength - The Yen broke out structurally late last year and hasn't looked back since. Tactically my upside targets were hit this week, but structurally this market has a lot more room to run. Given the high negative correlation between the Yen and US equities, this should continue to be a headwind for equity markets going forward.

We've had a heck of a rally in stocks over since late January, led by emerging markets, energy and metal stocks. Starting in mid-February the U.S. and other developed nations got the memo and started to play catch-up. We couldn't be happier with the performance of the stock market since then. But over the past couple of weeks all of our upside targets have been hit; all of the U.S. Indexes and sectors and about 90% of global indexes. So I've therefore been pretty neutral towards stocks since late last month, but I finally turned more bearish earlier this week.

Here is a market neutral trade that I think is definitely worth paying attention to. Whether you're bullish or bearish, this breakout is not something we should ignore: