Breadth divergences from earlier this year took a while to confirm, but once they did we saw considerable downside.
My Chart Summit Presentation was on how I use statistics and scans to visualize market internals for insight on breadth and relative strength. I used tables from our Weekly Momentum Reports in January and February to illustrate the clear deterioration in participation taking place at the time despite the major indexes grinding to new highs.
In this post, we’ll do a similar exercise and use stats to analyze whether breadth has been improving or deteriorating in Global Equity Markets over the past month.
Vedanta Ltd. has begun the process of a voluntary delisting of its shares from the public exchange, with the promoter group planning to buy out the remaining ~49% of non-promoter shares it doesn't currently own.
We spoke about Vedanta Ltd. in our Chart Summit India presentation last month as a stock setup we liked on the long side, so given this news, we wanted to revisit that setup and see what lessons could be taken away and applied in future situations like this one.
Normally one day of price action doesn't get our attention, but given our cautious view of stocks from a structural perspective, it's worth outlining why today's candle in the Nasdaq 100 could potentially be a big deal for stocks all around the world.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
The weight of the evidence remains mixed and suggests that there will be winners on the long side, winners on the short side, and a lot of stocks in the middle that aren't going anywhere.
An easy way to view that is through our five bull market barometers, which continue to suggest we're in a bear market. As a result, we're focused on the best opportunities on both the long and short side.
In this post, we're going to outline which area of the market we're looking to short and add several individual stock trade setups to our list of open ideas.
Let's start at the sector level. Nifty Commodities remain below the 38.2% Fibonacci Retracement of its 2020 decline at 2,635. With momentum in a bearish range and stuck below this level, then it makes sense to be erring on the short side and looking for a move back towards the lows near 2,075
Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Many of the relative trends in stocks that have been in place for a long time have come into question recently as they're showing signs of maturing due in part to the change in leadership we wrote about this week.
In this post, we'll highlight two structural intermarket themes that have remained robust throughout this tumultuous time for equity markets.
The first relative trend that hasn't slowed down at all is the relentless outperformance of the US over the rest of the world. Our first table shows the Wilshire 5000 (DWC) dominating every Global Index over just about every timeframe, from this week to the trailing year.
With Chart Summit India now almost a month in the rearview, I finally found some time to go back and rewatch some of the presentations.
Together with our partners, we hosted 20 amazing speakers and thousands of attendees and raised a remarkable amount of money to fight the COVID-19 pandemic. It was a really great event and an honor to be a part of.
With over 10 hours of content from some of the market's top technicians, I won't be able to do them all justice in just a short blog post so I highly encourage you to go watch all the full presentations for yourself. They can be accessed for free here.
With that said I'll try and do my best. Bruni recently wrote a post about some of his main takeaways from the conference which you can read here. I'm going to build on that today and share some of the things I found valuable from the handful of presentations I recently went back and watched.
When the picture isn't clear on the timeframe you're trading, it generally helps to zoom out one, or even two timeframes above it to gain some clarity around the primary trend.
Today we're going to compare and contrast the action in Gold/Silver and Natural Gas/Crude Oil to highlight this exact concept.
There aren't too many charts in the Equity Markets breaking out of decade-long bases on an absolute basis right now...
This week's Mystery Chart was though, and the vast majority of you were buying it against former resistance turned support. We agree with that approach and would be doing the same here.
Thanks as always to all those who participated, but there's just one catch...
The chart was inverted! This means most of you were actually selling the breakdown in the Latin America 40 ETF (ILF).
There has been a lot of talk about the potential implications on the broader market if Mega-Cap Growth and Technology stocks were to lose their leadership. Since they have been responsible for driving much of the gains in the major averages for years now... we can only ask ourselves, who might pick up the slack if and when this happens?
In this post, we're going to analyze the top-performing areas today and compare them to their strength before the market crashed in February and March.
We'll also look at the leaders from back then and see how they're holding up today.
This will give us an idea of whether we really are undergoing a change in leadership or not, and if so, where the new areas of strength are.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
