Silver has been consolidating in an ever tightening range and signs are showing that a big move away from this consolidation is setting up. And this week, the Silver iShares ETF ($SLV) may have tipped it's hand to which direction the next big move will happen.
Over 90% of the time, sentiment data is completely useless to me. I only care about it when we see it at or near extremes, which is not often. Some people dismiss sentiment data altogether in favor of tools that can be used more frequently. Not me. I'll stay patient all day and just wait for my pitch. The unwinds from extremes in sentiment can be very powerful and last much longer than investors usually expect.
Currently, we're seeing an interesting setup in Silver. Commercial Hedgers, which are traditionally the "Smart Money", have on pretty much their smallest hedges of all-time. In fact, Commercial Hedgers, who are always short Silver Futures, it's just how short, are now almost net long! That never ever happens. So it's got my attention.
When I get asked about what I think the most important technical indicators are, I have to start with price. This is where it all begins and ends. Everything else is just a derivative of price. Let's not forget that. We can use all sorts of other things to help supplement that price analysis, but only if we understand that is all they are, supplements.
After price, for me it's momentum and relative strength that we're looking for. We want to be in stocks outperforming other stocks and showing positive momentum. Why mess around with stocks showing weakness and not showing bullish momentum? That makes little sense. Today we are going to focus on the areas showing the most relative strength and momentum, how to profit from it, and what that means for the overall market.
It's funny, some friends of mine a few weeks ago were asking me about Island Reversals. Apparently they were arguing about whether a breakout in some stock was sparked by an island reversal or not. I came to the conclusion that they were both wrong, but I appreciated their interest in this rare pattern. The point I tried to make to them was that it wasn't so much about what it's called, but more about its implications. And they had the implications right, which is all that mattered.
I don't see too many of these things, but this week we got a classic example of the ever so elusive "Island Reversal".
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.
There is no denying that Technology has been a leader over the past 18 months. It's amazing how much this historic breakout in Tech was completely ignored in 2016 since U.S. elections are much sexier and help news people sell ads. "Forget the relative breakout in Tech, how does what Trump or Hillary said on the twitter today impact your portfolio?" You see the difference? We're not here to entertain or sell ads to sponsors. We're here to try and make money in the market.
Chart Summit 2018 is in the books. What another great day of thought out presentations filled with both educational and timely actionable material. We try to make it a point here not to live life in theory, but in reality. I go to too many conferences where all the discussions are purely academic and theoretical. Listen, I understand that this sort of material is 'evergreen' and can be watched for a long time afterwards. Sure, and I like some of that too, don't get me wrong. But we're here in the market to make money. So we want to see you put your tools to work in the current market environment. What are we buying and what are we selling? Let's make sure to talk about what's most important!
This year I invited a group of presenters that I thought each brought a different perspective on the markets. Last year I tried to do something similar, but the 2018 Chart Summit was unique in many ways. Once again, we were broadcasting live from the internet on a Saturday so our audience was all over the world in the comfort of their own houses, flats and dorm rooms. The diversity of attendees was one for the record books, in terms of age, sex, location and occupation.
This weekend I hosted the 2nd annual Chart Summit, a virtual technical analysis conference that is free for everyone and anyone to attend. It all started a year ago when I got a bunch of really smart friends together on a Saturday to share their process with the world and their thoughts on the current market environment. It was such a success that we may have accidentally created the greatest Technical Analysis Conference of all time, and it was FREE. You can still watch the videos of those presentations on the original Chart Summit 2017 page.
Our presenters this year didn't skip a beat. They took it right from where we left off last year and killed it in Chart Summit 2018. I know I personally learned a lot, and based on the emails and comments that seems like a pretty universal feeling among the audience. We had fun and we got different perspectives about market behavior from a variety of approaches. That's what it was about. I was blown away by some of the presentations. It was awesome!
Chart Summit 2018 is finally here. We could not be more excited for this event after the unbelievable experience we had last year! In January of 2017, I called up a bunch of my smartest friends and put on the first ever 100% virtual conference on Technical Analysis, and it was FREE! We had over 10,000 attendees from over 100 different countries. The feedback I received immediately after the event was like nothing I had ever seen before. I couldn't believe it.
If you missed last year's event, you can still watch the videos of those presentations here and I highly encourage you to do so. We had traders like Peter Brandt, Brian Shannon and Joe Fahmy explaining their approach and best ideas. Top Wall Street Analysts like Ari Wald, Jonathan Krinsky and legend Gail Dudack showed the world how they look at markets and what sorts of things they were showing their buy side customers at the time.
