From the desks of Steve Strazza @Sstrazza and Tom Bruni @BruniCharting
In this post, we're going to share 10 of the most important charts we're looking at right now. Some are merely for observational purposes or to highlight some of the broader trends at play in the markets while others are trade ideas in some of our favorite names and areas.
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?
From a Precious Metals' perspective, Palladium has been a clear leader for over a decade. Despite its strong long-term performance, a sharp March drawdown has people wondering whether this is the end of its reign over the Precious Metals' space.
In this post, we're going to outline our "keep it simple stupid" approach to answering that very question.
In early May we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.
If you haven't read our initial post linked above, we'd encourage you to check it out so you understand what the rationale behind these five indicators is.
It's also worth pointing out that last week we noted that despite the slight improvement in two of these measures, zero of the five were above their key risk levels. Despite that, the market was telling us that the short-term momentum remained to the upside and our long ideas were working well.
After a couple of strong weeks in the market, let's take a look and see how these longer-term indicators have fared.
We've been writing about how the momentum is to the upside for the last few weeks, but now prices are testing overhead supply across all the major Nifty indices.
If you haven't read our last few posts we'd highly encourage it, as they outlined our shorter-term views within the context of the long-term trends.
If you're all caught up, then let's take a look at the levels we're watching in the Nifty 50 and other indices.
Here's the Nifty 50 running into overhead supply near 10,000. Momentum failed to reach overbought territory despite the more than 35% rally since the index's March lows.
US Stocks remain the strongest game in town, with the Nasdaq 100 closing pennies from all-time highs today.
On the back of that, I wrote a post for US Subscribers outlining what the "safe haven" assets of Yen, Treasury Bonds, and Gold are doing and what it means for stocks as an asset class.
Given that US market action tends to set the tone for the rest of the world, I think it's a good read for Indian market participants as well.
Looking at Monthly Charts only takes about an hour per month and is one of the most valuable exercises in our process. By focusing on the long-term, we can filter out the noise and identify what's really happening with a stock, index, etc.
In this post, we wanted to share a few charts that stood out to in May.
Earlier this month we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.
In this post, we'll update those charts without going into as much detail as to why they're important. So if you haven't read our initial post linked above, we'd encourage you to check it out.
With that said, let's jump in and see how these charts have developed since.
Friday afternoons are my favorite part of the week, but not just because the weekend is starting. Instead, it's because we get fresh weekly candles to analyze the long-term trends of the securities and assets in our universe.
And this week, we've got a big development in Silver. Prices went out at their highest weekly closing price since September 2013.
Let's take a look at what it means and how we're trading it.
The market remains a hot mess where we're preferring market-neutral trades, however, some absolute trades are appropriate when the reward/risk is skewed heavily in our favor.
We outlined some favorable longs and shorts earlier today.
Another way of skewing the reward/risk in our favor is by looking for "big bases."
The way we learned it is the bigger the base, the higher in space and this is certainly a big base. And the reason we like looking for base breakouts in this environment is two-fold.
First off, big bases take time to form because they are caused by steady institutional accumulation. Mom and pop investors aren’t the ones creating this type of pattern, so we know that there’s underlying demand that will support prices if they do move lower.
