Every 2 weeks I sit down with the good folks at Benzinga to chat about the markets on their morning radio show. Today we discussed the rotation in stocks out of more interest rate sensitive sectors like Utilities and Staples and into things like Technology and Financials. This is all taking place as interest rates mean revert higher and bonds come off their highs. I think rates continue to spike and bonds are still a fade on any strength. We also go over Crude Oil, Apple and precious metals.
Every 2 weeks I sit down with the good folks at Benzinga to chat about the markets on their morning radio show. Today we discussed the recent breakouts in important sectors like Technology and Industrials. The fact that we're seeing expansion in breadth across other countries, particularly in Emerging Markets and Latin America, suggests there is real risk appetite out there for stocks. There are many favorable risk vs reward opportunities out there today and we went over several of them this morning.
The market is a never ending puzzle that we are constantly trying to solve. It's not like a jigsaw puzzle where once you put the pieces together your job is done forever. In the case of liquid markets, the pieces of that puzzle are always changing and therefore the conclusions are appropriately evolving. I thought today would be as good of a time as ever to go over the evolution of my macro thesis about stocks over the past 15 months.
Throughout the week I did a ton of intermarket work comparing many markets with each other. This is a great exercise and really helps me get some perspective on the flow of money around the world. Remember, it doesn't just disappear. When money leaves one asset, let's say Japanese Yen or U.S. Treasury Bonds, it goes elsewhere. In this case, we're seeing that money flow towards banks as well as Japanese and European stocks.
There are two ways to use this information. First, simply take the money flow data as confirmation of other things we're seeing around the world, particularly those that we discussed in this week's conference call. Second, through execution purposes benefiting from narrowing or widening of these spreads. I personally use them in both ways.
Here are some of the more interesting developments that I found:
Every month I host a conference call for All Star Charts 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 have been pounding the table on heavy cash positions for the past few months, so we're ready to start allocating that capital this week.
This month's Conference Call will be held on Wednesday July 13, 2016 at 7PM ET. Here are the Registration Details:
This week we are doing a full upgrade to our research platform. This is something that we have been working on all year, and finally, with the help of the incredible people at Optuma, we are happy to announce that it is officially happening. I could not be more excited to have everything on one platform with one provider and, most importantly, have the technology to be able to share it seamlessly with all of our Members!
There is a lot that we can learn from Warren Buffett, who many consider to be one of the greatest investors of all time. To me, the most important lesson of all of them, and there are many, is that there are no called strikes on wall street. In other words, in liquid markets, you are not penalized for "missing" a trade. This is a lesson that took me many years to finally understand and is something that has helped me tremendously.
