For those new to the 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?
This week on Happy Hour with Traders, I sit down with my old friend James Bartelloni. Some of you have seen him before, Chart Summit 2018 or on the podcast: Season 2 Episode 10. For those of you who are new to Bart and his ways of approaching markets, I encourage you to set aside some time to hear him out.
I first met Bart back in 2006 when I began studying for my CMT Exams. Back in the day they used to have this thing called CMTi, where CMT Charterholders would help candidates prepare for the various levels and teach classes online. They don't do that anymore, which is unfortunate, because there's no way I would have passed that CMT Level 2 exam without Bart's help.
Today we want to follow up on that theme, show why it's still intact, and outline stocks with an attractive reward/risk at current levels.
We've written extensively about what the Large-Cap/Small-Cap ratio means and how we interpret it. If you haven't read them, I'd highly recommend checking them out before continuing with this post (June 9th post and June 19th post)
But, to sum it up the idea here is that Small-Cap outperformance is associated with a Bull Market in Indian Equities because it signifies risk appetite among market participants and a broad-based market rally that has sufficient participation from sectors/industry groups.
At the beginning of each week we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the relative strength trends at play and give our outlook and some of the things we're watching for in the week ahead.
This week, we're going to highlight our US Index and Sector ETF tables and focus on the rotation we're seeing into more offensive areas of US Equities. We'll then tie this into what we're seeing across the FICC universe.
The stocks in the Dow Jones Transportation Average are getting the bid that they needed for this overall market to continue its march higher. Going back and doing the work, it's hard for stocks as a group to keep ripping without rotation into some of the underperforming areas. Transports were right near the top of our underperformer list for a long time.
Today, let's look deeper into the components of the Dow Jones Transportation Average. Remember there are 20 of them and consist of Airlines, Rails, Trucks, Logistics etc. This chart plots the drawdown from 52week highs on the x-axis and the y-axis represents the performance since June 5th, which was the former highest weekly close for the index:
The team published a piece last week highlighting a bunch of setups in the Natural Gas space. A few of these stocks are already pretty extended due to recent moves, but I've found that one of them still has a lot of meat left on the bone and we can get into it with some cheap call options.
Welcome to the second edition of “Louis’ Look”, where I share the key lessons I’ve learnt over the past week through interning at All Star Charts. You can read the first post here.
As with any week working with this bunch, plenty was learnt, so let’s jump right into it.
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 don't know if I've made myself clear enough. It's getting pretty obnoxious at this point isn't it?
We talk about this internally sometimes (ahem strazza), that we sound like a broken record.
My response is that we should be aware of our own behavior. The simple fact that we are recognizing, that yes, we are indeed being super annoying and just saying the same things over and over again, is information. It's really important to identify that.
Why? What does this mean? To me, it means that what's been working keeps working. And what needed to start working for those things to continue are working now too.
Exhibit A has to be the Dow Jones Transportation Average breaking out to new highs BEFORE the Dow Jones Industrial Average. Wait, What???? New phone who dis?
Welcome to this week's edition of "Under The Hood." You can read more about the column here.
What we do is analyze the most popular Robinhood stocks over the trailing week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
This was another interesting week as the market continues to grind higher with zero regard for whatever bad news is thrown at it. With the S&P 500 knocking on the door of new all-time highs, let's take a look at what Robinhood investors were buying this week.
One thing I've learned very quickly through writing this column each week is that contrary to popular opinion, these Robinhood investors are more often than not on the right side of the trend.
