I've learned a lot of things and met some amazing people during my trips to India over the years. One of them is the original meaning of the word "Guru".

You see, in America it definitely has a negative connotation. Most people I speak to don't even know what "guru" actually means. For us, it's usually a charlatan-type that no one likes. They usually know less than most and typically do much more harm to their audience than good. You'll often see them buying twitter followers and spamming your LinkedIn messages.

In marketing parlance, they refer to the "Guru" as the guy (usually male) who they spend all their time on marketing and making them look good. The better and smarter the “guru” appears to be, the more money that comes in, and the more profits for the marketing company, regardless of how completely full of it they actually are.

In America, whenever you hear, "Financial Guru", usually you want to run away as fast as possible.

Contrary to popular belief, Small and Mid-Cap stocks do not always provide better returns than Large-Cap stocks.

In academia, the thesis is that these "riskier" Small and Mid-Cap stocks should provide a higher potential return than more mature "Large-Cap" stocks. If they didn't, then rational investors would not own them because they're not being adequately compensated for the risk they're taking.

In the real world, we know that this theory is absolute nonsense. Instead of the consistent outperformance from the SMID (Small/Mid-Cap) segment of the market, we see periods of outperformance, periods of in-line performance, and performance of underperformance.

Since 2018 the SMID market-cap segments have been absolutely clobbered, but the weight of the evidence is suggesting that we may be at a major inflection point and SMID stocks are beginning a period of long-term outperformance.

Here we're going to explore the SMID resurgence thesis, what it would mean for Equities as an asset class, and how we're taking advantage of it.

From the desk of Tom Bruni @BruniCharting

Two weeks ago I wrote about the downside resolutions in Treasuries and Yen and the questions we would be asking in the days following. Given their rallies in the last week, we continue to ask those questions and observe what messages these "safe haven" assets are sending about the market.

This week's talk of the town is the "Island Reversal", and rightfully so, as some of the world's strongest indexes are sporting this pattern.

Let's take a look and get into what it could mean for the days/weeks ahead.

One of our "Five Bull Market Barometers" is the Nifty 100/Nifty Small-Cap 100 ratio due to its importance as a measure of risk appetite.

Today, we want to look at a more concentrated version of this ratio, the Nifty 50/Nifty Small-Cap 100, which is a major inflection point.

Let's discuss what's happening and why it's important to our broader view on Equities as an asset class.

From the desk of Steve Strazza @Sstrazza

Lots of charts are being shared showing the exponential growth in trading activity, new accounts, and anything else that might paint a story of euphoria at retail and discount brokerages since the pandemic broke out.

Here is some personal background only to provide context for what I’m about to discuss.

I live on an island. It is tiny, about 4 square miles. In fact, I live on an obscure island just above Key West which is technically much smaller than that. As a “Census Designated Place” it’s really just a collection of roads and canals, a village of about 4,400 people.

It’s nice, but it comes at the cost of an economy that relies almost entirely on Tourism. The people who live here are more or less fishermen or workers at the many hotels, bars, and restaurants in what’s generally a booming downtown area. Since shutting down our borders months ago, the local unemployment rate has spiked to an estimated 50%.

From the desk of Tom Bruni @BruniCharting

Thanks to everyone who participated in this week's Mystery Chart, as always. Most saw that I was doing it this week and didn't even bother to try guessing, simply stating that they were buyers of this massive base breakout on any pullbacks.

During Tuesday's Members-Only Conference Call we discussed not wanting to be aggressively long or short stocks on an absolute basis. Our Five Bull Market Barometers continue to suggest this is a choppy, messy environment where we need to be very selective when putting capital to work. Cash/patience and uncorrelated trades like Gold continue to work for those who have the ability to stay out of the equity market.

Not everyone has that luxury though. Many fund managers have a mandate to be long stocks regardless of the market environment. Some may have the ability to short stocks against their exposure, but many are "long-only" and need to outperform in weak markets by owning the stocks that are going down less.

Vedanta Ltd. has begun the process of a voluntary delisting of its shares from the public exchange, with the promoter group planning to buy out the remaining ~49% of non-promoter shares it doesn't currently own.

We spoke about Vedanta Ltd. in our Chart Summit India presentation last month as a stock setup we liked on the long side, so given this news, we wanted to revisit that setup and see what lessons could be taken away and applied in future situations like this one.

If you know me by now, you know how much I enjoy all things Japanese. For me, it's the best cuisine on earth. The architecture in Japan is spectacular. I can't take the smile off my face whenever I'm there. If you can believe this, I even passed the Japanese Sake Advisor Exam earlier this year.

There's a blog post I've been working on for a while I titled, "Investing Like a Sumo Wrestler". But that's a conversation for another day.

This week I was watching the new documentary, "The Delicacy", about sea urchins and the divers who harvest them. Uni, which is what the Japanese call the edible part inside the sea urchins, is one of my favorite snacks in the world. You can get good ones from Hokkaido, Santa Barbara and off the coast of South America.

The documentary was awesome, even if you don't like to eat Uni, like my wife. She also loves visiting Japan, but she'll tell you she prefers Italy or Greece. I'm torn.

As Market Technicians, we don't like catching falling knives. Today we want to reiterate several areas of the market that we either want to stay away from completely or even be shorting if you're into that sort of thing.

Plus we'll add a new index sector to our watchlist that's in danger of becoming a "falling knife" of its own.

Here's the leader of the weakest stocks, Nifty PSU Banks, breaking down to new all-time lows on an absolute basis. When bullish momentum divergences fail to spark any sort of upside traction, that shows that sellers are remaining aggressive even at lower prices and that the downtrend remains firmly intact. If prices are below their recent lows of 1,220 then we're looking for further downside towards 1,010.

Click on chart to enlarge view. 

If you are caught between a rock and a hard place, you are in a difficult situation where you have to choose between two equally unpleasant courses of action.

In many Indian stocks that is exactly where many market participants find themselves.

Let's take a look at why.

Most of what you'll hear me talk about are things I've learned from other people. In some cases, they were predecessors of mine and in other cases they're buddies and colleagues. It's funny because I try to do a good job of giving credit when I can, where I remember specifically who I learned something from. You guys who have been following me for a long time know that about me. But the truth is that sometimes I simply forget where I learned it. It's just part of my arsenal and I always assumed it was there.