Sign up for my free note here.

Before I position myself or act in the market, I weigh the evidence in front of me.

It’s my main job. It’s all I think about.

It’s how I make market calls, and it is the basis for my trading and investing decisions.

It’s also my most difficult job. I think any strategist or investor would agree.

The truth is… In technical analysis, there is no special indicator. There is no secret sauce. 

We’re all looking at the same charts. 

And it doesn’t take a rocket scientist to discern between an uptrend and a downtrend. Or a top versus a bottom.

That’s not where disagreement is sewn among us. That's rarely what makes one technical opinion or market view differ from another.

It’s about how we weigh all of the different data points.

It’s how we put together the puzzle. 

This kind of expertise comes from time in...

Sign up for my free note here.

I’m going to keep zigging while everyone else is zagging.

US equities aren’t even close to out of the woods. 

The bulls were just out here flexing about two green candles. Are you kidding me?

The truth is, this has been a bush league bounce. 

I took some shots, but most of them did not work. So, I’m raising more cash today and loading into some short exposure. This is the most I’ve had all cycle.

Let the non-disciplined buy this dip. There is simply no reason to rush in right now. Until the major averages reclaim their key levels, the bears are firmly in control.

I’m more...

Sign up for my free note here.

Those bear flags we discussed last week have since resolved higher.

After a little pop on Friday, today marks a critical follow-through day for the broader market.

But we already talked about how an oversold bounce was basically a foregone conclusion. We literally knew it was coming. The fact that we finally got it is not a bullish data point.

The next step now is to measure and judge the quality of this rally. There could be some bullish evidence there.

I already outlined some of the most important levels I’m paying attention to.

It’s all about VWAPs for the major averages. The large-cap indexes have the August VWAPs, and the SMIDs have the Q4 2023 VWAPs. They’re all right there.

Here’s the S&P 500 drawn up to show the confluence of resistance around this level.

Sign up for my free note here.

The current state of the market is indecision.

The major indexes popped to start the week, then they gave it back.

We had a little Powell pump mid-week, and then they gave that back.

Trump’s promise to play nice on tariffs Friday sparked another little rally, and markets closed strong, albeit well off the highs from Wednesday.

This indecision is illustrated by dojis on the weekly charts of the Nasdaq 100 and S&P 500.

And frankly, I’m undecided about just how much I want to dip my toes into US stocks right now.

As you know, I think the bulls have a lot of work to do. And with each passing day, I’m just not seeing it.

But you know where I continue to see...

Sign up for my free note here.

I’ve been tough on US equities lately. But it’s really nothing new.

Since last summer, I’ve been writing and talking about taking profits in the US - particularly in US growth - and redeploying that capital overseas.

But the truth is I’m rooting for US stocks. I always am.

So, let’s talk about what I need to see to get excited about them again.

In a few notes last week, I stressed the importance of registering two consecutive up-days at the index level. We’re not going to establish a tradable low without some bullish follow-through.

My attitude has been, “talk to me once we get back-to-back green candles.”

And while I’m really not impressed by the action at all, we did achieve this simple milestone earlier in the week. Congrats to stocks!

The bottom line is this is still a “show-me market.” Let’s discuss what bulls need to see next.

It’s all about growth stocks when...

Sign up for my free note here.

Today was all about the Fed. 

As usual, I was laser-focused on the market reactions.

Rates stayed put while the path forward was updated to reflect one fewer cut. 

The stock market pumped a bit while Powell was speaking, and dollars and rates ticked down. 

All in all, it was a mundane FOMC reaction. No fireworks. We discussed it on a live stream on Stock Market TV earlier.

But, one group stood out most today. And it’s extra interesting because it’s the same group that has been on top of the leaderboard all year.

I’ve made plenty of mentions to our Bear Market Checklist in recent weeks. 

It’s something we’re always keeping track of, but matters more in some times, and less in others. 

When we’re in rally mode, it barely crosses my mind. But when volatility strikes, and markets are selling off, it’s the most valuable thing I have. 

Let’s break down exactly what it is and how we use it to guide our analysis at All Star Charts. 

As we track the progress of a bull market, we have major indexes and assets that we want to see achieve certain milestones. This is also true for risk appetite ratios, credit spreads, and breadth indicators. 

So, we simply make a list of these charts and key levels along the way. 

When corrective waves occur, we look for these levels - which in many cases, represent a big line in the sand for these trends, to remain intact.  

We keep tabs of what holds and what doesn’t, and we weigh the evidence accordingly. 

When too many of these zones are violated, it can spell the end of the bull...

Sellers have dominated the tape for the past several weeks.

Any bid for stocks since we rolled over in February has been weak and short-lived.

At the same time, we are more than due for a serious bounce.

Some sentiment metrics are at wash-out levels. 

Put volume is at record highs.

US stock indexes are deeply oversold. 

In the case of Nasdaq 100 futures, this is worse than the pandemic lows from 2020. 

But oversold can always get more oversold.

And when it comes to sentiment data, there is simply no signal without confirmation from price.

So, I just gotta see it at this point. 

A rebound rally is surely coming, but how much selling will happen first? And how good will it be?

There definitely won’t be a meaningful bounce until we string together some consecutive up days. We haven’t seen back-to-back green candles in the S&P since its peak in February. 

Literally, zero bullish follow-through in almost a month. That needs to change for markets to make a...

What does “the best week ever” mean to you?

For me, it means one thing. 

Momentum thrust.

Momentum thrusts come in two forms… initiation and exhaustion. 

The former signals the beginning of a new trend, and the latter marks the end of an existing one.

For this reason, it’s very important to identify what kind of thrust we’re dealing with. You don’t want to get that part wrong. Luckily, we have tools for this, and it’s not hard.

Anyway, I’m talking about international equities. I think the backdrop is set up perfectly for a big seed change in favor of ex-US stocks. 

We talked about it on the blog a few weeks ago, and it’s happening in a big way as we speak. 

Today, we made a checklist of the most important charts in the market. 

We came up with about 20 key levels that, if broken, would suggest the end of the bull market.

Our list covers things from the major averages to crypto, and even some commodities and relative ratios. 

There are so many big levels being tested right now. In many cases, they are the prior-cycle highs, which means violations will result in some nasty failed breakouts.

We’re going to track them all closely and weigh the evidence. As more and more of these levels give way, we will turn increasingly bearish.

But, for me, one chart matters so much more than the rest over the short-term. Actually let’s just call it three, since it is the same situation for all of them.

Here’s a look at the S&P 500, Nasdaq 100, and Dow Industrial Average all digging in at their VWAPs from the August lows. These are the most important stock market indexes in the world.

They are all testing crucial support and rebounding in synchrony.

We’ve seen this story before. This won’t be...

Sign up here and get my free notes delivered right to your inbox.

It really looks like game over for crypto. Hear me out. 

Last week, I wrote a post about how I’m turning bearish. I’m out and even a little short. It’s been going well.

Then last night, Trump tweets about the crypto reserve and sets the whole space on fire.

Cardano is rallying 60%, and I’m sitting in my office preparing a list of things I need to see to turn bullish again. 

But by the time traditional markets opened today, it was clear this move was a head-fake. It was more of the same. 

Despite the bullish headlines, all the Sunday fireworks would be erased.

We’ve already discussed the sentiment of the asset class and how cryptos have reacted to news lately. It’s a big part of my bearish thesis. But, this is a new low.

Think about it. 

Crypto was public enemy number one just last year.

Now, we don’t just have a friendly and favorable regulatory environment...

It is always good to play a little devil’s advocate.

One of the things JC has got me accustomed to doing over the years is thinking like a bear… even when I’m not bearish.

“Make your best bear case,” he’d say. 

“What are the worst charts right now?”

It’s something we do just as a thought exercise. Even in the best of bull markets, this is a valuable technique.

Anyway, I thought of it today because I’m finding it uncomfortably easy to paint a negative outlook on stocks lately. 

And I’m not alone. Market sentiment is in the dumps as the bearish evidence keeps piling in.

So, I went to the analyst team and asked them for their most bearish charts this morning.

Let’s look at some and talk about what they mean.

First up, this one is from the Fons:

He talked about this failed break in the discretionary vs staples ratio in his note the other day.