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?
Options premiums are still pretty elevated across the landscape and the default mode for me when looking for trades to put on is still to prefer selling premium to express any directional bets.
However, JC put some bullish metals ideas in my head last week that are starting to look interesting to me. And there's one in particular that warrants a shot with a debit spread -- where we can use the prevalence of still high options premiums to help us lower our cost of participation in a directional bet.
A question we're getting a lot these days is when the market ultimately does bottom, do we want to be buying the stocks that have been hit the most or the ones that have held up the best during the market's fall?
As with most things in markets and in life, the answer is it depends. In this post, we'll explain why.
Every weekend we publish simple performance tables for a variety of different asset classes and categories along with brief commentary on each.
As this is something we do internally on a daily basis, we believe sharing it with clients will add value and help them better understand our top-down approach. We use these tables to provide insight into both relative strength and market internals.
This week we want to highlight our US Equity Index and Factor tables, as they are both showing near-term reversions in some of the most robust long-term intermarket trends.
Yesterday we published a post titled "The Reality Regarding Real Estate" in which we pointed out the long-term underperformance of REITs as a sector. And although we see no signs of this trend reversing any time soon, when we dug into the space we couldn't help but notice a select group of stocks outperforming not just Real Estate, but the broader market as well.
In this post, we will illustrate the relentless strength from this niche group of Data-Center and Cell-Tower REITs and offer two trade ideas in the space.
We also wrote a post lately in which we filtered the S&P 500 down to just 32 of its strongest performers based on a variety of metrics. Despite the weakness from Real Estate as a whole, five of the stocks on that list are actually components in our All Star Charts Custom Data-Center & Cell-Tower REIT Index.
These are the registration details for the monthly conference call for Premium Members of All Star Charts.
This month’s Conference Call will be held on Monday April 13th at 7PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with all of the other calls since 2015.
Thanks to everyone for participating in this week’s Mystery Chart. The vast majority of respondents were either sellers or wanted nothing to do with this messy mess of a chart. Some of our less risk-averse participants were willing to bet on a failed breakdown and buy a reversal back above the recent lows.
In our opinion, this is the definition of a structural downtrend and there is very little evidence to suggest that will change anytime soon. With that as our backdrop let's discuss why this chart is on our radar right now.
This is a weekly line chart of Real Estate (IYR) vs the S&P 500 (SPY) looking back about 20-years.
