From the desk of Tom Bruni @BruniCharting

Global breadth continues to improve as US stocks press up against all-time highs and many individual countries make multi-year/all-time highs.

Today I want to look at a breakout happening in a market that doesn't get much attention, Israel.

Going through our universe of coverage I noticed weakness in the Rupee over the last week, so this post is going to help put that into the perspective of the longer-term trend and outline how we're approaching it.

About ten days ago we outlined why it appeared Indian Equities were due for a pause from a tactical perspective and that's what we're getting.

With no movement in the major averages, there's nothing to do, right?

Wrong!

In this post, I outline a few of the stocks we're watching and why they're important.

From the desk of Tom Bruni @BruniCharting

Marijuana stocks have been an absolute disaster for longs in 2019, but one chart suggests that after a nearly 60% decline, the Horizons Medical Marijuana ETF and its components are set up for a counter-trend rally.

Here's the daily chart we've been using to guide us since the Horizons Medical Marijuana Life Sciences ETF (HMMJ) came public in April 2017. Following a quick double, prices settled into a 21-month range between 15 and 26 that was broken to the downside in late September after a failed breakdown and bullish momentum divergence were left unconfirmed.

After falling 35% from that failure and 60% from its 2019 high, the ETF is now showing signs of waning downside momentum as prices quickly recover from new marginal lows. It's also curious to note that this development is occurring at its IPO price around 10.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

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 the desk of Tom Bruni @BruniCharting

Stabilization in European Financials has been a big part of our bull case as they're one of the largest sectors of the Stoxx Europe 600, our broad measure of European stocks, and many individual European countries.

The other aspect of it is risk appetite. If the worst of the worst sectors is catching a bid, then market participants are not likely pricing in the end of the world.

With that in mind, let's take a look at what we're seeing in the space right now and what it means for risk appetite.

Here are European Financials (EUFN) on an absolute basis. After confirming a failed breakdown and bullish momentum divergence by closing back above their December lows, prices rallied nearly 20%, but are now experiencing waning upside momentum.

Thursday we looked at two lagging sectors that have been developing signs of a potential bottom like we saw in Energy, Autos, and others several months ago.

Today I want to follow up on that post by diving into the Nifty PSU Bank Index components to see if what we're seeing there supports the action that's occurring in the equally-weighted index.

In September we saw a massive spike in the number of new 63-day highs in the Nifty 500's components.

Today I want to take a look at look at the data and answer the questions how rare is this signal? and what are the forward returns?

The Nifty Public Sector Bank and Media sectors of the market have been laggards for a while, but we're now beginning to see signs that rotation into these areas is ahead.

From the desk of Tom Bruni @BruniCharting

Tuesday's Mystery Chart had a lot of people talking and guessing (incorrectly, as usual), so thank you all for your feedback and participation.

Opinions were mixed on how to approach it, but I'd say the majority are looking to position themselves for further upside.

With that as our backdrop, let's get into it.

From the desk of Tom Bruni @BruniCharting

In today's Chart of The Week we look at the ratio of Chinese Internet stocks relative to US stocks and why it's potentially pointing to outperformance in the months and quarters ahead.

This premium post will outline the stocks we like to take advantage of that thesis. If you've not read that post, I'd recommend you do so you have the proper context around these ideas.

Stocks are breaking out to new highs, however, not all areas of the market are participating to the same extent.

Today we're looking at a chart that suggests one market laggard is potentially undergoing a trend change and may outperform in the weeks and months ahead.