In this Episode of Allstarcharts Weekly, Steve and I are focused on expansion of global breadth. We’re seeing more and more countries around the world breaking out to new 52-week highs. This week the Global 100 Index is making new highs and now Taiwan has also joined the group with Brazil and Switzerland who were already doing so. With Sweden and Japan right there near highs as well, the breadth expansion continues, not the deterioration that the bears are preaching. It’s hard to be bearish equities if the Dow Jones Industrial Average is above 27,000 and the German DAX is above its 2015 highs. Those are the key levels we’re watching. But breadth is expanding, not deteriorating. That’s for sure.
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NIFTY 50 Is Heading To 13,000
The trend for NIFTY stocks is up. That has not changed. Like many stocks and indexes around the world, NIFTY been mostly stagnant since early 2018. Unlike most stocks and indexes, however, NIFTY has managed to put in higher lows and higher highs along the way. So it’s not just a consolidation.
I do believe NIFTY resolves this consolidation higher and heads up towards 13,000 – this is the target: [Read more…]
Look At The Dow Jones Averages As A Group
One week it’s the Dow Jones Utility Average pulling the weight. This week it was the Dow Jones Transportation Average up over 2% while the Dow Jones Industrial Average was basically flat. It’s always one of them, which is why the Dow Jones Composite Average, the combination of all of them, continues to hold up so well. Remember the DJ Composite has 65 stocks, 30 from the DJIA, 20 from the DJTA and 15 from the DJU. The Dow Jones Composite Average went out at new all-time monthly closing highs just a few weeks back. Our bet is that this uptrend continues.
Here is a weekly chart of the Dow Jones Composite. These are the types of charts we want to be buying, not selling: [Read more…]
A Big Move Is Finally Coming In The US Dollar
It’s been a while since we talked about the Dollar. The truth is, this trade has really been a Nothing-Burger all year. G-10 currencies have been a snooze-fest until just recently. I have good friends who specialize in this space and they’re bored. That’s not good for their business, but I have a suspicion that things are changing.
Let’s get right into it. Here is the US Dollar Index breaking down on a weekly timeframe and unable to hold its previous highs. This sort of thing reminds me a lot of early October 2018 for US Stocks. From failed moves come fast moves, is how I learned it. I’ve also come to understand over time that this is not something to be afraid of, as many books often hint to. I think this is something to embrace. It presents the best risk vs reward opportunities of any other setup I know: [Read more…]
Semiconductors Breaking Out Is NOT Bearish For Stocks
I want to make something perfectly clear: Semiconductors breaking out of a 6 month base to new all-time highs is historically not a characteristic of a downtrend for semi’s, tech, or US Stocks as an asset class. These are facts. As go Chip stocks, so goes Tech. And in case you forgot, Technology is a quarter of the entire S&P500.
Feel free to argue against me on this. You’ll lose. Semiconductors going up is NOT bearish for stocks. In fact, I can think of few things more bullish.
Here is a Monthly Chart of the PHLX Semiconductor Index $SOX breaking out to new all-time highs:
Video: Is This A Massive Top For The US Stock Market?
In this Episode of Allstarcharts Weekly, Steve and I talk about the underperformance of the S&P500 relative to both Gold and US Treasury Bonds. The big question I think worth asking is whether these are massive distribution patterns in US Stocks on a relative basis, or if these are just consolidations within an ongoing uptrend that has been in place for years already? If you’re in the bear camp / recession coming crowd, then you would expect these tops to complete themselves to the downside. If you think stocks go on to make new all-time highs (I do), then these are not massive distribution patterns but just healthy consolidation instead.
[Read more…]
Remember To Buy In November!
How often does someone tell you to Remember to Buy In November? Probably not as often as you’ll hear Sell in May and Go Away!
But what does this all mean? What are these silly nursery rhymes all about and why should we care? Or should we even care at all?
You’ll hear even some of the smartest and most experience market participants dismiss market seasonality altogether, almost as if they’re too good for it. Maybe they’re scared of things they don’t understand, like my 2 year old cousin gets when she’s confused. Or maybe seasonality is not as intellectually satisfying to them as say something like, fed policy or trump impeachments.
Either way, we do care about seasonal trends at All Star Charts because they help us with both identifying market trends and risk management. Here’s what US Stock Market Seasonality means to me: [Read more…]
All Star Interviews Season 3, Episode 11: Walter Deemer, Technical Analyst With 57 Years Of Experience
Walter Deemer has been a Technical Analyst for 57 years, after starting his career at Merrill Lynch working for legendary Technician Bob Farrell. He is a founding member and past president of the CMT Association and coined the phrase, “When the time comes to buy, you won’t want to!”, which is the title of one of the books he’s authored. We’re lucky to have someone on the podcast who was in the business at a time when interest rates were NOT in a downtrend! In this episode, Walter talks to us about what it was like charting in the 1960s and 70s and what sentiment was like as we entered the 1980s and one of the greatest economic expansions in America history. “Watch their feet, not their mouths”, is what Walter Deemer says when he encourages us to look at what investors are doing, rather than their opinions. This was a great conversation where we discuss what he calls our “Shoulda Fund” and what the Breakaway Momentum Strategy (breadth thrusts) means to him. I really enjoyed this one! [Read more…]
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