From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and eliminate the x and y-axes and and all labels eliminated to minimize bias. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.

The point here is to not guess what it is, but instead to think about what you would do right now. Buy, Sell, or Do Nothing?

Last week we wrote about signs of a long-term bottom in stocks emerging and the market has continued higher since then. Today we want to look the individual sectors to identify where we want to be selling strength, buying weakness, and avoiding altogether.

We've also written a post about the individual stocks with the best reward/risk proposition right now, so be sure to check that out as well.

In our other post we looked at all the sectors to identify our stance toward each and equities as an asset class, so this post will focus on the best individual stock trade setups in the market right now. If you haven't read that, please read that first so you have some context around this post.

These are the registration details for the monthly conference call held for Premium Members of All Star Charts. In this call we will discuss the global market environment and how to profit from it. As always, this will include Stocks, Interest Rates, Commodities and Currencies. The video of the call will be archived in the members section to re-watch any time and the PDF of the charts will be made available as well.

This month’s Conference Call will be held on Tuesday March 19th at 7PM ET. Here are the details for the call:

If there is one thing that has worked since October, it's cash. I feel like people are afraid of that word. Like you're doing something wrong for raising some (or a lot of) cash. Do you think it makes sense to always be fully invested? I don't.

I look at everything through the lens of potential opportunity cost. What else could we be doing with that money? In liquid markets, sometimes it's treasury bonds, other times it's gold, and of course all of the market neutral pair trades and options strategies to profit from sideways markets.

Cash is an investment too. Why do you always have to be all in? You want to think 50 years out? Go ahead. We're only concerned about the next couple of quarters. We'll worry about next year, next year. And 50 years from now? I only hope to be around sipping wine and ripping through charts. We'll see...

So about today.

From the desk of Tom Bruni @BruniCharting

My presentation at Chart Summit 2019 focused on market breadth and how we like to keep our process of looking at the subject pretty simple.

While that presentation covered a number of our methods of measuring the market's internals, in this post I want to share some stats we pulled this weekend that help provide some valuable context around the market's rally from the December 24th lows.

The table below outlines the major US Indexes we cover with performance stats from important inflection points: The January 2018 highs, the September 2018 peak, and the December 24th low.

We also have some additional stats listed like percentage below 52-week high and above 52-week low, days since those events occurred, whether the daily RSI reading is in a bullish or bearish range, and whether prices are above their 200-day moving average.

The columns we want to pay attention to for now are the first three.

Click on table to enlarge view.

Imitation is the best form of flattery. And we liked our trade idea in $WYNN so much that a nearly identical play setting up in a completely different sector warrants us the opportunity to repeat the same mechanics.

One of the cool things about Chart Summit this year was that we were all surrounded by smart experienced market participants with unique styles and approaches to the market. When you have a collection of talent like this, I think it's wise to pull them off to the side and pick their brains. In this conversation, I ask Todd Gordon about Fibonacci Analysis and why he uses it so frequently. Some people like to dismiss it, and that's fine. If I didn't think it helped, trust me, I wouldn't use it. But it's been helping me every day for well over a decade. I really enjoyed this chat with Todd and I'm thrilled that he was able to be a part of the first ever live Chart Summit in Breckenridge, CO.

There's something appealing about stacking edges in my favor while taking a shot on the short side of a casino stock that gives me a little extra juice. Waitress? I'm going to need another cocktail...

From the desk of Tom Bruni @BruniCharting

Throughout the week we've been raising some caution flags about the short-term direction of Equities (here, here, and here).

Now that we're seeing some downside follow-through for the first time since December, I wanted to outline a few more potential short setups on an absolute and relative basis.

First let's start with why I'm looking at these sub-sectors to begin with.

The S&P Midcap 400 Consumer Discretionary is one of the cleanest charts I see out there on an absolute basis, with well-defined risk and reward/risk clearly skewed in favor of the bulls. Since there's no ETF to trade this, I had to look through some of the individual components to see how we can best express this thesis in the market.

Click on chart to enlarge view.

On last night's All Star Options monthly conference call, we laid out a play to buy a potential bounce in a leading name in the materials sector. For completeness, the trade plan is below.