It’s the weekly currency edition of What the FICC?
Is the dollar going to finally bounce?
I have no idea, but the euro will likely answer that question in the coming days.
Check it out!
Expert technical analysis of financial markets by JC Parets
by Ian Culley
It’s the weekly currency edition of What the FICC?
Is the dollar going to finally bounce?
I have no idea, but the euro will likely answer that question in the coming days.
Check it out!
by Ian Culley
From the Desk of Steve Strazza @Sstrazza
When investing in the stock market, we always want to approach it as “a market of stocks.”
Regardless of the environment, there are always stocks showing leadership and trending higher.
We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.
The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too.
We already have multiple scans focusing on stocks making all-time highs, such as The Hall of Famers, The Minor Leaguers, and The 2 to 100 Club.
We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics.
Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.
Now, we’re also highlighting lagging stocks on a regular basis.
With the NFL Playoffs getting underway this weekend (Go Bills!), it’s time we put the offense on the field!
I was kicking around a bullish idea in a consumer staples name during our Analyst meeting today. The chart looks great. The setup is good. We can position for a nice potential reward versus the risk we’d incur to put the trade on. Everyone agreed that its probably a good trade.
But… is it aggressive enough?
Answer: No, it’s not.
The thinking that emerged from our chat was that risk is back on in the stock market; therefore, we need to get into the most reasonably aggressive names we can. And one of the areas where risk is most definitely “on” is in the homebuilders sector.
If all we did was watch the evening news or listen to the inflation and interest rate scaremongers, we’d reasonably conclude that a long-term and painful bear market for real estate and housing in particular is a slam dunk. No contest.
If a severe real estate bear market was in the cards, would we be seeing homebuilders ripping of their recent lows the way we have over the past couple of months?
Check out this chart of Toll Brothers $TOL: [Read more…]
by Ian Culley
From the Desk of Ian Culley @IanCulley
Is the dollar going to finally bounce?
As I pointed out last week, if there was ever a place or time – it’s’ now! But that doesn’t mean it’ll happen….
One thing is certain: The markets don’t care what I think. This includes the US dollar.
But when I look at a chart of the EUR/USD, the largest component of the US Dollar Index $DXY, it’s running into a logical level of resistance.
How the euro reacts to current levels will set the tone for the dollar in the coming weeks and months.
by Louis Sykes
You seeing this?
Riot Blockchain $RIOT is rebranding to Riot Platforms “amid a bleak outlook for the crypto industry.”
You can’t make this up.
Only after the stock has stumbled into a 96% drawdown do they change the name of the company.
by JC
Historically, Industrial stocks are the ones with the highest positive correlation with the overall market, among all the S&P sectors.
Financials are obviously important. We don’t have bull markets around here without them.
Technology has also been important, considering it has the highest weighting among all the sectors in the U.S.
But when you run the numbers, it’s actually Industrials that comes out on top.
Industrials are officially the market’s most important sector.
And so when we take a look at how they’re behaving, I’m still not seeing the weakness that most investors keep telling me is coming.
In fact, look at Industrials breaking out to new multi-year highs relative to the rest of the market: [Read more…]
In the Spring of 2022, JC came to me and said: “What do you think about managing an options income portfolio for me? I’m looking for some more strategy diversification in my portfolios. It doesn’t need to be anything sexy, just steady.”
Ok, I’m probably paraphrasing a bit, but that was the gist of his ask.
So I got to work on putting a plan together for him. When we looked at it together, it became obvious that we should offer this portfolio to the All Star Charts community who might also be interested in some further diversification. Even if people don’t take our trades, it could be a productive learning experience for everyone.
So we got to work and we launched the All Star Options Paid-to-Play (P2P) service in May 2022.
Each trading day, we either enter a new delta-neutral options credit spread in a liquid ETF (from a list of the most liquid Index and Sectors ETFs), or we play defense on an open position with an adjustment to put us in a better position to win. And we leave resting GTC (good-till-canceled) limit orders to close our credit spreads at profit targets which get filled periodically at the whim of the markets.
So far, so good.
Here is our calendar year 2022 Performance (launch date May 11th) with an overlay of S&P 500 performance: [Read more…]
by JC
First Santa Claus showed up for his rally.
Now the “First 5 Days” of the year were up (+1.37%).
That’s 2 for 2 so far in the January Trifecta.
So now what’s next?
The January Barometer is the last leg of the early year triple crown.
“As January goes, so goes the rest of the year”. According to my handy Stock Trader’s Almanac, the S&P500 has an 83.3% hit rate for the full year when January is in the green.
So with more and more positive signs for stocks, it really shouldn’t be a surprise to anyone.
The trend for most stocks has been up and to the right. That was a strong back half of 2022 and a very strong 4th quarter.
And not just in the U.S., but we’re seeing breadth expansion internationally.
The weaker Dollar has certainly helped.
And while our Neutral approach for the S&P500 remains intact, underneath the surface things look so much better.