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All Star Charts

Expert technical analysis of financial markets by JC Parets

No, I Don’t Think This Is The End Of The World

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Is this 2008 all over again? 1987? 1929? I doubt it.

We’re not seeing any stress in credit, which is where the real problems start. In fact, some stocks and sectors are going up while others are going down. We’ve seen relative strength in Energy, Utilities and Consumer Staples. Remember, the Dow Jones Industrial Average closed at a new all-time high just last week. It’s easy to forget right?

So what’s the problem? The problem is that we have failed breakouts in all of the major U.S. Indexes, and at the very least, it is going to take some time to resolve. The questions are: How long? and How low could we go? [Read more…]

Which Way Are Stocks Headed Now?

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There are a lot of interesting developments working through the markets these days. Whether it’s the relentless sector rotation underneath the surface or the divergences between small and large-cap stocks, there is no shortage of topics to discuss about the current environment. I have been in the camp that a breakdown in Bonds to new multi-year lows would likely be accompanied by a lower yen and higher stock and commodities prices. Through last week that strategy has worked really well.

Moving forward, however, how does this face-ripper in rates impact U.S. stocks? Is the relative strength in financials this week a positive sign for equities? Or are they just getting a sympathy bid because of rates? Are Semiconductors finally going to break out above their epic 2000 highs, which they’ve been flirting with all year? What about Gold and Crude Oil? How do they fit in?

This morning I was on the Benzinga Premarket Prep Show discussing what I felt are the most important topics in the markets right now. Here is the interview in full: [Read more…]

How Stocks Do Depends On Bonds & Yen!

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I have to give credit to our Intermarket Analysis work for a lot of our success over the years. This “Cross-Asset” perspective is incredibly valuable, particularly when it comes to identifying and staying with important trends. As a supplement to our Technical work in U.S. Stocks and Indexes, we incorporate a variety of Intermarket relationships to help us formulate a thesis. These include Bonds, Commodities and Currencies.

When it comes to safety, I don’t care what people believe is a safe haven, I only care how the market reacts when it needs to go safe. When markets stressed and volatility rises, stocks fall in price and US Treasury Bonds and Japanese Yen reap the benefits.  When did Yen and Bonds get strong? Summer of 2015 just as the S&P500 was topping out. When did Yen and Bonds peak? When stocks got going several months before the 2016 elections. Both of these are near their 52-week lows, which makes perfect sense with Stocks at all-time highs.

So, the way I see it, we’re most likely going to see Yen and Bond strength if stocks really sell off this quarter. The other side of that argument is that stocks are likely to do well in an environment where these “safe haven” assets are selling off. Here is a chart of both U.S. Treasury Bonds and Japanese Yen close to major breakdowns. If this is indeed the case, and both of these assets do break, I would bet that stocks are ripping in that environment: [Read more…]

[Premium] What The Monthly Charts Are Suggesting

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The one thing we do know is that stocks are not in a downtrend. New all-time highs are consistent with a stock market environment where prices are rising. We saw new all-time monthly closing highs in most of the major U.S. Stock Indexes last week. The question is more about whether or not we’re starting to see this trend change or deteriorate in any way. The short answer is no. We do not see enough evidence to support a bearish approach towards equities, quite the opposite in fact.

Here’s what I’m seeing: [Read more…]

The Bear Case For US Stocks

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From the desk of Tom Bruni @BruniCharting

For most of this year we’ve been writing about the overwhelming amount of bullish evidence for US Equities, however, as part of our “weight of the evidence” approach we’re always questioning our thesis (i.e. here and here).

In today’s post I want to share that exercise as I perform it, outlining some current concerns and what the market would potentially look like in an environment where stocks as in the US as an asset class are falling. We’re going to stick with our top-down approach and start with International Equities and inter-market relationships, then drill down into specific examples that help illustrate what we’re talking about.

[Read more…]

Checking In On Dow Theory

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From the desk of Tom Bruni @BruniCharting

There’s been a lot of talk about equity market breadth both in the US and globally, but one thing I’ve not seen mentioned throughout the debate is Dow Theory. While there are five tenets of Dow Theory, today I want to focus on the aspect regarding confirmation among the three averages: The Dow Jones Industrial Average, The Dow Jones Transportation Average, and The Dow Jones Utility Average, by assessing their primary trends.

[Read more…]

China Under-Performance and The US Equity Market

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From the desk of Tom Bruni @BruniCharting

Every so often we hear the narrative that under-performance from China’s stock market is a canary in the coal mine for US Equities, and the recent tariff tantrums have brought this discussion front and center. Today I want to look at this relationship to see if it has any merit or if it’s just a smart sounding soundbite that you can use around the office water cooler.

[Read more…]

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