Last night was our Live Conference Call that I host at the beginning of each Month.
It gives us an opportunity to take a step back and identify the direction of primary trends.
This is helpful, because without understanding the environment we're in, how could we possibly pick and choose which tools and strategies to incorporate?
This step often gets forgotten about by investors.
Many would rather just shove their strategy down the market's throat whether it makes sense for that environment or not.
I find that foolish.
One chart that I thought told an important story last night was the Nasdaq Composite plotted with the New Highs - New Lows list.
It shows the bottoming "process" taking place beneath the surface:
We held our February Monthly Strategy Session last week. Premium Members can access and rewatch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.
I remember last year getting yelled at and trolled online because I was talking about breadth improvement.
Just because their stupid computers weren't telling them that it was time to buy didn't stop me and my team from simply counting how many stocks were going up vs how many were going down.
Boy did that serve us well as stocks have absolutely ripped higher over the past couple quarters.
We've been in a raging bull market while most investors keep asking me when stocks are going to bottom.
That's how far removed most people are from reality.
In fact, market breadth has improved so much that we're now seeing more stocks making new 52-week highs than we saw at the peak in the S&P500, Dow Jones Industrial Average and Nasdaq back in late 2021.
Yes, more stocks are making new highs today than there were at the "market's highs":
By my work, everything started to improve for stocks after June 16th.
That was when the list of new 52-week lows peaked and stocks started the process of going up all the time, instead of going down all the time.
In bull markets, stocks go up. In bear markets they go down, not sure if you heard...
Anyway, these days I'm seeing a lot of investors pointing to October 13th as the market bottom, because that's when the S&P500 and some of the other indexes made their lows.
But by then, most stocks had already bottomed. It was only a few of those large-cap indexes left still falling.
In fact, I was interviewed by Maria Bartiromo on national television the very next morning (Oct 14th), and I was telling her how stocks had already been in a bull market for months.
Last week we held our January Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each
"JC, how could you say we're already in the 8th Month of a new bull market???"
The things people call me over email or on twitter are not something I would repeat in front of my mother, or daughter, and certainly not in front of any of you guys.
But I'm a big boy. I spent a lot of time on trading floors, dugouts and locker rooms. I've heard way worse.
It is interesting, however, to observe the feedback I get from just some basic arithmetic.
This isn't like some random opinion I have about the economy, or Fed policy or earnings. This is just 3rd grade math.
Are more stocks going up? Are more stocks making new highs? Or are more stocks going down and making new lows?
Since June, the answer has been up and certainly not down.
Notice how the new lows list peaked in Q2. Even though some of the large-cap growth-heavy indexes made new lows later in the year, even for just a hot second, by that point there were almost no stocks left that were going down.
