Over the past few days I've received a number of requests from members asking me to post a the updated charts on my favorite U.S .Stock Market short right now. In last week's letter I mentioned how Utilities were not a place we wanted to be long and there were a few ways to take advantage of the individual components of the sector.

Today I want to dive into those individual charts:

From the desk of Thomas Bruni @BruniCharting

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Over the past few weeks there have been some interesting developments in Agriculture commodities, and Soybean Oil is no exception.

Before we get into the price action, I think it's worth noting that we're in the middle of a seasonally strong period for Soybeans, while hedger positioning and public sentiment are coming off multi-year extremes. These should both continue to provide a tailwind for prices of Soybean related markets in the weeks and months ahead.

From the desk of Thomas Bruni @BruniCharting

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I look at a few hundred charts per day across multiple timeframes, and thousands each weekend, but I very rarely find an idea that's actionable at that particular moment. This begs the question of why I look at so many charts if they rarely lead to actually putting on a trade, to which the answer brings us to the title of this post.

When utilizing a top-down approach to technical analysis, every liquid global asset class provides some type of information that's useful, even if you don't trade that asset class directly. Instead, each new piece of data adds to the pool of information that we as market participants use to make decisions. When the weight of evidence suggests a more probable outcome, that is when it's appropriate to put on a trade that expresses that theme or thesis in the most capital-efficient way possible.

I just finished my Commodities and Currencies review for the week and wanted to share some of my notes. Here you go:

For long time readers of All Star Charts, you guys pretty much know my deal. I put in more work that most people and I include markets in my studies that the majority of investors choose to ignore. In order to take a weight-of-the-evidence approach to the market, I need to, in fact, weigh all of the evidence. Therefore, I have to look at every single stock market in the world on both short-term and long-term time frames.

From Latin America, to Europe, to Asia Pacific, all developed economies and emerging markets are on my list. I include every U.S. Stock Market Index, from large-cap S&P500 and DJIA to Small-cap Russell2000 and everything in between. We look at every U.S. Sector and sub-sector, from Energy, to Financials, to Gold Miners and Technology. Then break it down to the individual stock level. On the commodity side, we review 16 commodity futures contracts from Energy to Metals and Agriculture. Then we turn to currency markets, for both informational purposes and trade ideas. Finally, we review a long list of intermarket relationships to help recognize where money is flowing and also again, for trade ideas. The list from where this process begins can be found...

This Thursday March 24th, I will be presenting at an all day live webinar presented by Investor Inspiration. I will be joining six additional speakers and my time slot begins at 1:45PM ET.

During my session, we will be discussing some of the basic technical analysis principles that I incorporate in my work every day. These include Supply & Demand analysis, Momentum, Fibonacci, Correlations and how to use Moving Averages for trend identification. 

We’ve come a long way in the last 3 months.

Back in November of last year, I decided to start writing an “Open Letter About the Current Market Environment” and posting it on my blog. This was just a summary of what I call my “homework” (flipping through hundreds of charts every day to find the best risk/reward setups). I was already doing the work so I thought why not share it with my followers and see if it resonated with them.

As you know, I'm a firm believer in listening to the markets when they speak. And in the case of my open letter, the "market" definitely spoke. My inbox was literally flooded with emails thanking me for the insightful trades included in my letters and asking when the next one would be posted. At that moment, I knew I was on to something BIG. 

It's been awfully lonely being a China bull over the past couple of months. All I keep hearing is how China is falling apart and slowing and all sorts of negative sentiment towards the country and its stock market. In the real world, however, where we are forced to live and where only price pays, we've seen emerging markets dominating for 2 months and I think the squeeze higher we've seen in China is just getting started.

First, here is a chart of the Shanghai Composite breaking below last August's lows to start the new year. After a couple of months down there, we are now back above those former lows confirming a failed breakdown. I think this is the catalyst to continue to send Chinese stocks soaring:

U.S. Treasury Bonds have treated us very well this year. Coming into January we wanted to buy a breakout above $122-123 in the U.S. Treasury Bond ETF $TLT with a target above $133. This upside target was achieved last month as interest rates simultaneously hit our downside target, 1.65% in the 10-year yield. Since then, we've wanted to back off and let new data dictate our next move. Over the past month, we've seen rates bounce back up towards 2.0% and the $TLT has fallen back down towards $128.

The question now becomes: Do we get back in on the long side? Or is there more consolidation or price correction needed first?

This is a forgotten space. Since early 2014, the last time Ags had any sort of meaningful rally, we've just seen a deterioration of prices. Whether you're looking at Corn, or Coffee, or Soybeans, the Ags have gotten destroyed. We've see massive rallies this year out of some of the other commodities like in Energy and Metals. Now I think it's time for the Ags to participate in this Commodities Rally.

One of the best ways to be positioned over the past 2 months has been to be in Emerging Markets, not in U.S. Stocks. I've been pounding the table on this trade since January and it has really worked out in our favor. The big question today is: Now What? Does this thing keep going, or does the longer-term trend of the U.S. outperforming Emerging Markets resume in the second quarter?