From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
New Mystery Chart!
For those new to this exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
I've heard some version of this every single day since the Spring.
These are the types of questions that come my way during bull markets. I don't get them when stocks are in downtrends, that's for sure. Different types of questions come in those environments (How low can we go? Aren't we due for a bounce? etc)
It's a new year right? The holidays are over. Make your donations, help whichever causes are most important to you, and now dedicate a little bit of selfish time to improve your own life.
Social Media can be a very valuable tool. It can also lead to frustration, misallocation of time & energy, and in many cases even depression.
Unfortunately these days, I hear more negativity about social media than I hear positive things. But that's not the platform's fault. It's your fault. We curate our own streams. We decide what we want to read and who we want to follow and interact with.
If your social media experience is causing you anxiety, then you're doing it wrong.
If your social media experience is anything other than inspiring, educational and rewarding, then you're doing it wrong.
If you find yourself constantly getting angry at something you read or someone you follow, then you're doing it wrong.
If you're not learning every day from the people you follow, you're doing it wrong.
The team at All Star Charts has launched a new report called the Minor Leaguers Report. This report will highlight small stocks showing signs of making the jump to the Big Leagues!
If the success of the Under the Hood report is any indication, I for one am very excited to have this expanded universe to pick stocks for making options plays.
Have you noticed that Consumer Staples are working on their lowest levels relative to S&Ps in over a decade?
Remember, underperformance from Staples is a classic characteristic of strong uptrending stock markets, which I'm not sure if you've noticed, we've been in.
Last week I went into detail about what we're looking for as a sign of a market correction. In fact, I showed 4 important factors we're watching. Make sure you're caught up on those here.
Today, I'd like to point out how one of those 4 signs continues to flash Green, meaning: Buy Stocks.
Here is the relative strength of Consumer Staples inverted. When the black line is moving up, Staples are underperforming. When the black line is moving down, Staples are outperforming. As you can see, underperforming Consumer Staples is consistent with higher stock prices and the opposite is also true, when Staples are outperforming stocks are usually under pressure.
In a further effort to identify individual equities that fit within our larger more Macro thesis, we couldn't be happier to roll out and share our latest bottoms-up scan: "The Minor Leaguers."
We'll also be writing a post every other week where we outline some of our favorite setups from the watchlist. This is the first edition.
Moving forward, we'll be rotating this column with "Under The Hood" each week.
In order to make it onto our Minor League list you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort the stocks by their percentage from new highs. Easy.