Welcome to the third edition of “Louis’ Look,” where I walk through the lessons I’ve learned over the past week through interning at All Star Charts. You can read the previous post here.
In this post, I want to step back from the market and focus on people. I really enjoyed writing this one, so buckle in.
The words "Support" and "Resistance" get thrown around a lot. In most cases, it's stated as fact, "This level is resistance", or "There is support at that price". What is important to remember, however, is that these are only "Potential levels" of support and resistance. We may have evidence suggesting there could be overhead supply near a certain price, but we won't know for sure until after the fact.
Today I want to talk about how many Indexes in the U.S. are approaching "Potential" Resistance.
Let's take a step back and define what that actually means. Resistance is when there is an overwhelming amount of selling pressure vs buying pressure. There are more sellers, than buyers (or as the smart ass in the corner will mention, it could be one giant seller and not necessarily more of them, but I digress). Bottom line is, that Resistance is the price where there is more supply for an asset than there is demand for it.
The first obvious one is the S&P500 getting back to its February highs:
Healthcare stocks are breaking out to their highest levels in history. This isn't something where we're waiting for them to recover. We're betting that this is actually just the beginning. Healthcare stocks are going a lot higher if the S&P500 is going to 4000. That's the bet we're making.
Here is the Healthcare Index Fund $XLV closing at back-to-back all-time highs the past 2 weeks. I think there's another 14% if upside from here:
This week on the show, Howard and I talk about the winners and losers of the post Covid world. We spend a lot of time focused on the companies doing great things and building cool tools, but who are the ones getting left behind? Which ones are the shorts?
Last night we held a Happy Hour With Traders and discussed market internals and breadth with some of the best Technicians in the business. We focused mainly on the more popular aggregate breadth indicators such as the percentage of new highs and lows, the percentage of stocks above the 200-day, and so on.
We also talked a bit about our process for analyzing breadth on a more granular level, which is simply by looking at our universe of indexes, sectors, industry groups, and individual stocks each week. When we run our scans and look at the individual charts themselves, we continue to see a higher number of new highs and bullish momentum characteristics.
This is evidence of improving breadth.
This week's Mystery Chart was one of the latest Industry Groups we noticed making fresh all-time highs. In this post, we'll discuss the chart and offer some trade ideas in some of the groups' strongest components.
It's always fun chatting with Catherine over at BNN Bloomberg. She has the uncanny ability of getting me on her show just at the right time! In February, I explained very clearly why we were raising cash (the week before the biggest market crash ever), and then in early July I was screaming on television to buy stocks aggressively, just before a slew of new sectors started breaking out to the upside.
Today, I have a similar bullish view. This is a market that is rewarding us for buying stocks. That's the bottom line. And we don't see any evidence of that changing yet. Catherine also asked me about the Bond Market and I explained why I think rates go higher.
We like the have fun with these. Life is short. I hope you enjoy it!
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 new 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.
These are the registration details for the live monthly conference call for Premium Members of All Star Charts.
This month’s Conference Call will be held onTuesday August 18th at 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.
JC published a piece on Monday highlighting the rotation we're seeing into Transportation stocks. A bunch of names on that list have already experienced some good moves. But one of the names is likely to start playing catch up and that has me interested.
When owning an ETF, it's important to understand how it's constructed. In other words, you need to know what you own.
When it comes to the Emerging Markets ETF $EEM, you're essentially betting on Asia as ~72% of its holdings are from China, Taiwan, South Korea, and India.
Some might say these are the most important charts in Emerging Markets...so let's take a look.
This week on Happy Hour with Traders, I sit down with my old friend James Bartelloni. Some of you have seen him before, Chart Summit 2018 or on the podcast: Season 2 Episode 10. For those of you who are new to Bart and his ways of approaching markets, I encourage you to set aside some time to hear him out.
I first met Bart back in 2006 when I began studying for my CMT Exams. Back in the day they used to have this thing called CMTi, where CMT Charterholders would help candidates prepare for the various levels and teach classes online. They don't do that anymore, which is unfortunate, because there's no way I would have passed that CMT Level 2 exam without Bart's help.
