This is the video recording of our September 5th Monthly Charts Live Strategy Session
Ready For Higher Oil Prices???
by JC
Oil prices just went out at their highest monthly close since last October. That was almost a year ago.
The trend for Crude Oil has turned up.
Here’s all that former resistance from 2018 turning into support more recently: [Read more…]
No Defense At All
by JC
With stocks selling off this quarter, the bears are back.
Could you imagine still telling yourself that the rally we got in equities over the past year was a bear market?
What kind of serial killer thinks like that?
A 3-5% correction in some of the major Indexes can cause people to lose their minds.
Heck, you may be wondering yourself if this is the beginning of a huge move lower for stock prices. I certainly am.
Remember, every big move starts with a small one. But not every small move turns into a big one.
That’s where Credit Spreads come in. If there is real stress in the market, you’re going to see it in credit.
But as stock prices corrected this month, Credit Spreads only got more narrow.
Here’s an easy way to view that, comparing the prices of High Yield Bonds vs US Treasury Bonds: [Read more…]
[Premium] Mid-Month Conference Call Video Recording August 2023
by JC
This is the video recording of the August 2023 Mid-month Conference Call.
3 Charts You Need to Watch
by JC
For me, this is what we want to watch.
Are you wondering whether this correction in the stock market can turn into something much more severe?
I certainly am.
As thrilled as we are to see some of these Tech and Growth stocks get hammered, the question is whether this aggressive selling will spill into other more value-oriented areas.
There are 3 main charts that we have on our radar.
The first one is in credit. If we’re entering into a new bear market, or an aggressive period of high volatility, you are likely to see that stress in the bond market. If Treasuries begin to outperform High yield, it’s evidence of that stress.
The next one is in High Beta vs Low Volatility stocks. This ratio tends to move very closely with the averages. If you start to see a bid in Low Volatility stocks relative to High Beta, then this correction is likely to be more severe.
And finally the Consumer Discretionary vs Staples. Similar to the High Beta / Low Vol ratio, this tends to signal rotation into more defensive areas of the market.
Here’s what that looks like: [Read more…]
If Not Tech, Then What?
by JC
Remember in the back half of last year, when virtually everything was working EXCEPT for Tech stocks?
Well a funny thing happened early in 2023, money rotated into Tech and other Large-cap Growth.
These Tech stocks did so well, that people who are bad at math convinced themselves, and others around them, that it was only 5 or 7 stocks going up.
That was hilarious.
And while it definitely wasn’t just 7 stocks, but thousands of stocks ripping in your face all year, Technology was certainly the leader along the way, particularly on a market-cap weighted basis.
But that relative strength has been rolling over the past few months as momentum has also diverged negatively.
Doesn’t that make perfect sense during a regime change?
Take a look at a chart of Technology relative to the S&P500 already making new multi-month lows: [Read more…]
Your Rug Pull Arrived
by JC
It took most investors over a year to realize stocks had been in a bull market that whole time.
And now that, “breadth is finally improving” and, “the recession isn’t coming”, you get the classic rug pull and rotation into defensive sectors. [Read more…]
Weakest Time For Stocks
by JC
This is just a friendly reminder that the most bullish period of the entire 4-year cycle has just come to an end.
How’d you do?
Stocks broke records in terms of performance and have been in the midst of a raging bull market, driven by sector rotation and breadth expansion.
All of this is perfectly normal.
Stocks did very well at exactly the time that they were supposed to.
Not sure why so many are surprised by it.
Now that even the biggest permabears threw in the towel and started turning more optimistic, we are now entering the most bearish time for stocks: [Read more…]
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