Since we launched Allstarcharts India in January, we've seen great traction and have gotten a lot of feedback and suggestions from our readers and subscribers. In fact, many of the ideas we've added to the platform and are currently working on have started from conversations with you all.

From the desk of Tom Bruni @BruniCharting

A major part of the thesis for higher prices in Canada was the breakout in Financials (and REITS) which represent roughly a third of the TSX Composite, however, over the last few weeks we've seen failed breakouts in many of these leading stocks.

In this post I'll highlight some charts identified during my Chartbook update that describe the type of environment we're in for Canadian stocks and why a more neutral stance appears appropriate. Given the correlation between equity markets around the world, I'd also encourage you to read some of our other free pieces about the US here, here, here, and here.

From the desk of Tom Bruni @BruniCharting

After last week's move to the downside I figured there would be a lot of changes to the IBD 50, and there were, so I want to highlight the characteristics of some names that continue to hold up well.

Some of you guys have been reading my work for over a decade. But I understand there are many newer readers, so I think it's important to address what's going on here. I've been called a Permabull many times for over 2 years now, meaning that they believed I just always had a bullish bias towards stocks. The truth is that while so many were eager to pick a top during this entire rally, I was consistently bullish because the weight of the evidence pointed that way. This is no longer the case and our approach has had to adapt over the past week to a new environment.

We're fortunate to have been accurate with our risk levels. As soon as Small-caps broke 169, things got bad. There was no reason to be in them for us if we were below that in $IWM. Large-caps broke our levels early this week and things got progressively worse after our prices were breached. That is why we set them. That's the good news. The bad news is that I'm confident this is just the beginning.

Is this 2008 all over again? 1987? 1929? I doubt it.

We're not seeing any stress in credit, which is where the real problems start. In fact, some stocks and sectors are going up while others are going down. We've seen relative strength in Energy, Utilities and Consumer Staples. Remember, the Dow Jones Industrial Average closed at a new all-time high just last week. It's easy to forget right?

So what's the problem? The problem is that we have failed breakouts in all of the major U.S. Indexes, and at the very least, it is going to take some time to resolve. The questions are: How long? and How low could we go?

It's not just the U.S. that is breaking our important levels, stock market indexes all over the world are reacting to the volatility. Europe is flirting with dangerous areas but Brazil and Russia have bucked the trend, likely due to their exposure to Energy. Other countries like India and Tech based markets have been the ones coming off the most in the emerging group.

What else can we do with that money?

That's the question we always want to ask ourselves.

I get asked all the time, "Hey JC, I own this stock, it's down x amount and I'm not sure what to do?". Man if I had a bitcoin for every time I got asked that one.

To me the answer is very simple. If you woke up that morning and you could do anything you wanted with that money, anywhere in the world, with any asset class, is that stock what you would buy?

If the answer is no, then you know your answer. Go buy whatever you want to buy. Transaction costs are nothing these days, so the pennies on that are no excuse to sit in something costing you way more. 

CSX has been good to us.

We've been bullish $CSX all year. And we had a successful options play this summer that recently came to a profitable conclusion. JC calls CSX "a beast!" I can't argue with that.

And low and behold, even as the overall market has hit a little bump in the road over the past week, $CSX just continues riding the rails, appearing to be in the final stages of completing a nice and tidy two-month base with eyes on a $91 price target and above.

With earnings on deck, the chairs are aligned for an opportunistic play to put elevated options volatility to work for us.

There are a lot of interesting developments working through the markets these days. Whether it's the relentless sector rotation underneath the surface or the divergences between small and large-cap stocks, there is no shortage of topics to discuss about the current environment. I have been in the camp that a breakdown in Bonds to new multi-year lows would likely be accompanied by a lower yen and higher stock and commodities prices. Through last week that strategy has worked really well.

Moving forward, however, how does this face-ripper in rates impact U.S. stocks? Is the relative strength in financials this week a positive sign for equities? Or are they just getting a sympathy bid because of rates? Are Semiconductors finally going to break out above their epic 2000 highs, which they've been flirting with all year? What about Gold and Crude Oil? How do they fit in?

This morning I was on the Benzinga Premarket Prep Show discussing what I felt are the most important topics in the markets right now. Here is the interview in full:

From time to time I like to review some of my Best Practices for my own benefit, but also for the benefit of readers of this blog, and for subscribers to All Star Options. So let's get right to it...

This past Friday marked an important monthly date in the regular cycle of options expirations. Friday marked the line in the sand where we crossed under 21 days until October expiration.

Why is 21 days until expiration important?

In short: because of theta and gamma.

For long premium positions, theta decay starts to become a major drag, and increasingly so with each passing day. For short premium positions, gamma has the potential to produce wild swings in your position equity. Neither of these scenarios are very appealing for obvious reasons.

Lets breakdown the risks and actions to take for a variety of common strategies.

There is a lot of noise being made this week about potential divergences in U.S. Stock markets. The one thing that gets lost in the shuffle is that just because asset A is rising and asset B is not keeping up, that asset A needs to correct and come down to meet asset B. Rarely does it get mentioned that asset B can just get some rotation and catch up to the relative strength that asset A is showing. In fact, during bull markets (which we're in, not sure if you heard) the latter is a perfectly normal occurrence.

Today we're going to take a look at a more macro correlation that I think we need to be watching. We're talking specifically about the long-term behavior patterns of the S&P500 in America and the DAX in Germany. Going back many decades, these two indexes really move in sync.