In this Episode of Allstarcharts Weekly, Steve and I talk about the fact that the only sectors making both weekly and monthly all-time highs are Consumer Staples, Utilities and REITs. That's not exactly the type of leadership one might expect to see in a strong bull market, leading many to believe that it is not, and therefore we should be selling stocks. My argument is that while on paper, yes, technically those ARE the only ones making new "weekly AND monthly" all-time highs, sectors like Technology, Consumer Discretionary and Communication (heavily weighted $FB & $GOOG) are just a stone's throw away from doing the same. These are all far from "Defensive" sectors. I think the positive rotation continues and these sectors play catch-up.
In elementary school, nothing was more interesting to me than Space. And a quick look at my Lego collection would confirm this in two seconds flat. I was obsessed. But more in the "great unknown" way. So many questions. So many possibilities.
As an adult, I'm still fascinated by people (Elon Musk, Richard Branson, etc) and companies who are involved in trying to bring humanity into space and further exploration. And it makes me happy to see the stocks that represent these endeavors do well, because its often a clue that they are on to something, that they are making headway.
In recent days, the US Aerospace & Defense ETF, which tracks all the biggest names in this space, showed signs of making new discoveries -- of all-time high price territories.
If you've been in our world long enough you've heard someone say, "Technical Analysis Is Voodoo". As far as I'm concerned, the more people who think that the better it is for us! As Technicians we are analyzing the behavior of the market and its participants. Our human emotions are driven by fear and greed and therefore markets trend, by nature. This is why Technical Analysis works. Today I sit down with Sebastian, the wine maker at Rancho Maria Winery in Sonoma, CA, to discuss this very topic.
There are a lot of messy charts out there, but we've been discussing the importance of having a global perspective and using weekly/monthly charts to stay focused on structural trends as opposed to the day to day noise/chop we've been experiencing.
Today we want to look at an area showing relative strength that's still offering opportunities for those who need to put cash to work.
Sometimes we spot an opportunity, but we have to be quick to capitalize on it. Fading volatility spikes is one of those situations. If we're willing to take on a little more risk in favor of a high probability setup and we act quick, nice profits can be earned. We've got a play in Gold developing right now that offers up this potential.
With markets pointing higher (if you follow price and ignore the headlines, like a responsible trader), it makes sense to take good looks at stocks coming out of strong bases. One hospital stock recently caught our attention as it is beginning to quietly emerge out of a 4-year base.
This is not just a Stock Market, this is a "Market of Stocks". And not just Stocks from America, but Stocks all over the world. Stocks don't move up and down because of what is happening in New York or Washington DC. They move based on the supply and demand dynamics for the asset globally. To suggest otherwise is irresponsible.
Let's look around the world, because it's the right the thing to do. And let's see how stocks look globally, rather than be narrow minded into thinking the world revolves around what happens within US borders.
Daily charts get a lot of love. I certainly preach the value of monthly charts every 30 days or so. But the weekly charts, ladies in gentlemen....the Weekly Charts, allow us to see through the day-to-day noise, but keeps us within an intermediate-term time horizon. On weekend mornings some people read the newspaper with their coffee. I go through my weekly charts.
Here are a few that stood out in the United States this week:
Imagine being in a business where you take a nearly risk-free slice of every transaction, world-wide. That would be a lot of money. Well, companies which do just that do exist, and they likely take up some real estate in your wallet...
Yep.
And it just so happens the charts agree with this sentiment, so much so that $VISA is fixing on (another) significant breakout. So let's see if we can take a slice out of the toll collectors ride.
