From the desk of Tom Bruni @BruniCharting

There are trends people tend to pick up on indirectly, usually by looking at individual stock charts or ETFs on an absolute basis, seeing the relative strength/weakness, and connecting the dots.

See something in one chart; it may not be all that special. See it in a lot of charts from the same area of the market...you're usually onto something.

That's the indirect way, but if we look at a trend directly, we can get a better feel for the exact strength of that underlying trend/theme.

In this post, I want to highlight a few trends that I know people are aware of, but may not realize their severity.

From the desk of Tom Bruni @BruniCharting

The US Dollar has frustrated the majority of market participants this year, particularly if they're only looking at the US Dollar Index.

With that said, we've been focused on other US Dollar pairs that aren't getting much attention but are trending well and providing us with plenty of opportunities.

From the desk of Tom Bruni @BruniCharting

We've been writing about the lack of trend in the Major Indices and highlighting some relative strength in places like Software and Insurance, but overall signals remain mixed.

This morning I set out to write another post about areas showing relative strength, hoping to find a clean theme that the most actionable stock setups fit within.

What I found can be boiled down to the length of two tweets.

"Going through the S&P 1500 I see a number of actionable names on the long side, but they don't all fit a theme. They're all from different areas of the market. Where there are themes I see a lot of extended names and unattractive entries."

and

"I can see that the path of least resistance is higher in a lot of names, but that doesn't mean that current levels offer an attractive entry."

Great themes, but no great way of executing them.

or

From the desk of Tom Bruni @BruniCharting

Last week I sat down with Justine Underhill for Real Vision's "Trade Ideas" show to discuss a tactical trading opportunity in Palladium and a longer-term play in the Insurance industry.

These are themes I've shared with our Institutional Clients over the last few weeks. I hope you find some value in them.

From the desk of Tom Bruni @BruniCharting

Wednesday's Mystery Chart is one of my favorite charts, so thank you everyone for your feedback and participation.

I received a lot of answers, but most of you were buyers of this recent pullback, while others were waiting to see if prices reacted positively to support before jumping in. Not many of you were sellers.

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

Monday was our Members-Only Conference Call for both India and the US (see JC's video here) and the most overwhelming theme was that Equities are not trending, so what does that mean for us as market participants?

Twice a year the Nifty Indexes are reconstituted on March 31 and September 30, replacing stocks that don't fit the criteria with those that do. This past weekend we adjusted our chartbooks to reflect the changes that occurred at the end of the first quarter, so I wanted to write a quick post detailing some of the changes.

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. It can even be inverted or a custom index.

The point here is to not guess what it is, but instead think about what you would do right now. Buy, Sell, or Do Nothing?

When trading against the primary trend, there are a few things we look for to define our risk and raise our probability of success.

We outlined them in a post a while back, but they essentially boil down to the following:

1. Our downside price target has been met.
2. Prices undercut that price target and quickly reversed.
3. Momentum diverged positively as prices made a new low.
4. Prices are very extended from their mean (200-day moving average).
5. Quick follow-through confirmed the supply/demand imbalance.
6. Short interest in the stock (not required, but amplifies move).

We are now seeing a few potential opportunities given that stocks have been hit, some harder than others, over the last few weeks.

From the desk of Tom Bruni @BruniCharting

Every few weeks I get a message from someone asking a question along the lines of "Should I enroll in the CMT Program?" As with most things, the answer is it depends on your individual situation.

While I can't offer personalized advice to everyone, I can discuss my experience and the key benefits now that I've completed the process.

This post is going to be split into two parts; one where I explain my answer to the question that prompted this post, and the other where I summarize my actual experience in the program.

From the desk of Tom Bruni @BruniCharting

Wednesday's Mystery Chart is one of my favorite right now, so thank you everyone for your feedback and participation.

I received a lot of answers, but most of you were skeptical of the breakout and wanted to see more before getting involved. A few others wanted to be long with a tight stop and few, if any, were sellers.

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

The actual chart was the ratio of the Insurance subsector ($IAK) relative to the S&P 500, which is breaking out to 11-month highs as momentum gets overbought for the first time in nearly 2 years.

To me this looks like a textbook trend reversal, so while there may be some backing and filling over the near-term, Insurance stocks look set to outperform over the intermediate/long-term.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

The trend is your friend...but what do we do if there is no trend?