Last week I published, A Non-Random Walk Through The S&P500, where I went into detail about what I’m seeing across every single sector in the United States until I’ve gone through all 500 stocks in the entire S&P500. This is done on both a weekly and daily timeframe, so it’s a little over 1000 charts in total. Without a doubt, the conclusion was clear: this is still a stock market environment to buy weakness, not to sell strength. In this month’s Conference Call we discuss a lot of the supplemental data, particularly around the world, to support those bullish views towards stocks. While there is a nice list of trade ideas in this call, I encourage you to use the Walk Through The S&P500 and this Conference Call together. I think they compliment each other really well. [Read more…]
[Premium] Should Stock Market Bulls Be Concerned About Credit Spreads?
The way I learned it was that the Bond Market is smarter than the Stock Market. I’ve heard theories that it’s because the Bond Traders are smarter than stock jockeys. Maybe it’s because the Bond market is a lot bigger than the Stock Market. Maybe it’s all a bunch of nonsense. Who knows? The way I like to approach it is simply to use them both to my advantage equally. They both play a role in the process. When we see evidence of risk appetite in the stock market, we want to see the bond market confirming that and vice versa. It’s when one is suggesting one thing and the other is signaling something else that we start to question what is really going on here.
Today we’re going to focus on 3 specific spreads that we want to be watching closely here as the Summer comes to an end.
[Premium] Members-Only Conference Call Monday August 21st at 7PM ET
Every month I host a conference call for All Star Charts Premium Members where we discuss ongoing themes throughout the global marketplace as well as changes in trends where new positions would be most appropriate. This includes U.S. Stocks & Sectors, International Stock Indexes, Commodities, Currencies and Interest Rate Markets.
We’ve been bullish towards US and Global Stocks once again since May. I still think this is an environment where we need to be buying weakness in stocks, not selling strength. The weight of the evidence is still pointing to an increased amount of risk appetite, not risk aversion. I ran through all 1000 charts of the S&P500 stocks on both weekly and daily timeframes and there are more good ones than bad ones. A lot more good ones, in fact. It’s hard for me to fight that.
I’ll do my best to lay out my weight of the evidence conclusions and walk you step by step with how I got there! This month’s Conference Call will be held on Monday August 21st at 7PM ET. Here are the Registration Details: [Read more…]
[Premium] A Not So Random Walk Through The Entire S&P500
It’s the middle of the summer and everything is quiet. Even the slightest bit of volatility brings in the panic. It’s pretty amazing to watch. There are two schools of thought here. First, the historic short positions in S&P500 Volatility Index Futures have their monthly unwind, and stocks get adjusted accordingly. It’s a volatility trade unwinding causing these 1 or 2 day spikes. But then the shorts come back in, make money for a period of time and then get swept out again, like this week. The cycle repeats. Now we move on again and volatility shorts crush it for the rest of the summer. That’s thesis 1.
The other scenario is that there is a lot more squeeze behind this one and stocks can have a much bigger and longer adjustment. Take a look at the C.O.T. Reports. The numbers are outrageous. These Volatility shorts are natural buyers of volatility. It’s scary when you think about it. But regardless, they stay short. It is what it is. Stocks continue to shake them off. But is this time different?
We’re going to try and answer that question by going through 1000 charts of the S&P500. Each of the 500 components of the index on both a weekly and daily timeframe. We are going into this exercise with no bias whatsoever. We cannot care in which direction the market is moving. We just need to take the weight of the evidence as it comes and position ourselves as best we can. This is one of the most valuable tools I have, going through this 1000 chart process. I want to walk through it with you this time just so you can understand where I’m coming from when I come up with my ultimate conclusions, or questions for that matter.
A wise Egyptian man once told me,
If you trade the averages, you get average returns
So we’re going to focus on individual stocks today.
[Premium] Open Letter About The Current Market Environment
In this week’s members-only letter we discuss the following topics:
- Copper and Stocks Both Went Out At New Highs
- Yield Curves Are Steepening
- Retailers and Discretionaries in General Showing Strength
- Sector Rotation into Energy
- Financials look ready to go: $BRKB and $AXP stand out
- Belgium Broke out. The rest of Europe is likely next!
Deep Dive Into Gold and Silver
It’s important to not only have a broader perspective on the market, but to look underneath the surface to see what is actually taking place. Precious Metals haven’t exactly been my favorite asset class lately. It’s for good reason too. There have been so many better places to be. It’s not even close.
So today we ask the question: Is it time to be buying precious metals?
My Gold workbook has 100 charts in it. You can find the entire thing regularly updated here.
[Premium] Monthly Conference Call Video Recording July 2017
Two weeks ago I put out my Q3 Playbook, so you guys know how I feel about most things. Not much has changed in July. So for this month’s call, I wanted to open it up to whatever you guys wanted to talk about. During the first half of the video there are some points that I definitely wanted to make sure I got across. The rest of the time I just answered questions, many of which were very good and relevant to today’s market environment. You can watch the entire video here and download the PDF of the slide deck. [Read more…]
[Premium] Retail Stocks: The Good Ones and The Really Bad Ones!
Have you heard that story yet about how Amazon is destroying traditional retailers?
Let me ask you: Is this actually the case? Is this it for retailers? It’s over?
Fortunately we have actual data that can help us answer this question. We’re not making guesses based on estimates that will be revised 20 times over the next few quarters. As Technicians we know what is actually taking place between the buyers and sellers for these stocks. It’s up to us to make the correct interpretations, of course, but that price data is the only reliable data in existence when it comes to retail stocks.
This is the infamous chart of the S&P Retail Index, which is equally weighted. So in this chart, Amazon does not represent a large percentage of the index. Each retail stock, about 94 of them, are weighted approximately the same across the board. [Read more…]
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