These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.
This month’s Video Conference Call will be held on Wednesday September 2nd @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.
Welcome to this week's edition of "Under The Hood."
What we do is analyze the most popular stocks over the trailing week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We are using a variety of new sources to generate the list of most popular names, which we'll explain more each week as we add new data sets. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.
Last week, we added some stocks from a list of large institutional purchases we track, and this week we've added some names that experienced unusual options activity.
As we continue to include new sources, the number of potential trade opportunities we can choose from increases and gives us a larger universe of favorable setups to take advantage of.
The Dow is one of the most important major averages in the world. We monitor it religiously as it has historically been an excellent gauge for the broader market.
This week three old-school Dow stocks- Exxon $XOM, Raytheon $RTX, and Pfizer $PFE, were replaced with some fresh blood from the likes of Salesforce $CRM, Honeywell $HON, and Amgen $AMGN. JC wrote about why the Dow is so important to our process and what these changes could mean earlier this week, which you can read here.
In this post, we'll take a deeper look at the impact of this restructuring by analyzing the relative strength trends of the new and old holdings. We'll also discuss the Apple stock split, as it will also have major implications on the Dow's future composition.
Long story short, we think the recent reconstruction of its constituents leaves the Index in a much stronger position for the future.
The Fixed Income, Commodity, and Currency markets are near and dear to my heart. Ever since I began learning Technical Analysis, I've always loved analyzing things that are "off the beaten path." This included everything from Interest Rates to Soybeans to the Norwegian Krone. Equities are great and all, but this is the stuff that gets me up in the morning.
In addition to the blog posts we do on the site, I've wanted to explore new ways to share that passion with you all and show why even if you're not investing in these markets directly, they're worth paying attention to.
That brings us to my weekly show, "What The FICC?"
In this weekly video series, I'll be highlighting the most important chart or theme from these three asset classes while doing my best to tie that analysis back to Equities through an intermarket signal or a trade idea.
Thanks to everyone for the feedback on this week's Mystery Chart. We had a lot of good answers this week. Many respondents were cautious of the waning momentum but on balance, most of you were buyers. We are too.
It was a chart of the iShares MSCI Netherlands ETF $EWN which just broke out of a 13-year base to fresh all-time highs (shown below).
But it's not just the Netherlands making new record highs, the All-Country World Index $ACWI just made new all-time highs as well. There aren't many things more bullish than World Equity Indexes trading at their highest levels in history.
In this post, we'll highlight the positive breadth characteristics we're seeing within Global Equity Markets and outline trade setups in some of the strongest countries around the world- including the Netherlands, as a way to express our bullish thesis.
But first, here's why we're so bullish on International Equities in the first place. Check out these new highs for ACWI.
One of the things I preach in the All Star Options service is to manage risk by defining risks up front or having strict stop loss levels in place. And on the flip side of that equation, I also repeat over and over the need to remove risk from winning trades when given the opportunity -- particularly in long call or put plays.
When holding long calls or puts, my rule of thumb is to always sell half of my position when I've doubled my money.
Salesforce, Amgen, and Honeywell were all welcomed into the Dow Jones Industrial Industrial average this week. And all three are being greeted by enthusiastic investors. (Especially Salesforce $CRM!)
While the first two names are in sexy industries, don't sleep on Honeywell $HON. Here's what JC said in a recent post on the new Dow additions:
Here’s a chart of Honeywell, which I’m not sold on yet. I think it does break out, but I think this is only something to be long if we’re above 165. Below that and there is too much opportunity cost, I believe.
Gold made new all-time highs this summer. That was pretty cool. Hadn't seen that in almost a decade.
Some people always like buying gold. They joined some secret society once where they convinced themselves it was part of a "diversified portfolio". I don't know what kind of strategy that is, but it was a really shitty one for a long time.
That all changed earlier this year when Gold Miners $GDX finally broke out above 31, which had been our key levels for years. And the metal itself broke out above 1580 or so which had been our equivalent level there.
That's how I learned it. You'll hear my friend Ralph Acampora say that all the time!
"You Never Want To Fight Papa Dow"
My interpretation is that there is wisdom in the Dow Components. If you want to know which way the market is headed, focus on those 30 stocks.
I'm not going to get into the discussion about whether the Dow is the best index or not. I've made my case before and stand by it today more than ever. If you have a problem with Dow Jones or Standard & Poors, stop complaining about it and just go build a better index. It's not that hard. We do it every day.
The Dow Jones Industrial Average, however, is a perfectly good index and gauge of stock market strength or weakness. One of the best parts is that there are only 30 components!
Hellooo??? Do you want to go through 500 stocks? Or 3000 in the case of the Russell3000?
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?
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the relative strength trends at play and preview some of the things we're watching in order to profit in the current market environment.
This week, we're going to highlight a number of critical Stock Market Indexes and Sectors, as well as assets in the FICC Markets that are approaching logical levels of overhead supply and pose the question... "Are risk assets due for some corrective action or consolidation?"
