This is a market of stocks, and not just a "stock market".
All of these Indexes, from the Dow Jones Industrial Average to the Russell2000 Small-caps, are made up of components. There are 30 stocks in the Dow and 2000 stocks in the Russell2K, for example.
Are more of them going up? Are more of them making new highs? Are more of them showing bullish momentum characteristics? Are fewer and fewer components doing these things as the indexes make new highs? What about in downtrends? Are more stocks confirming the new lows in the indexes or are fewer and fewer stocks making new lows and showing bearish momentum characteristics as the market makes new lows?
The answers to these types of questions is what we call, "Market Breadth Analysis". There are a lot of ways to do this on all sorts of different time horizons. In this lesson we go over all the methods we use to decipher market breadth, which can be used by both individual traders and the largest financial institutions in the world.
Wow what a weekend! Thank you all so much for your support.
We had 10,000 people register for Chart Summit, our Live Virtual Technical Analysis Conference. There were over 30 presentations and we raised over $50,000, just on the first day, to help fight COVID-19. You can still donate here.
We made it really easy to access the videos and organized them so you can go back and watch whenever you want. Just go to Chartsummit.com and click Watch The Videos and you're on your way!
Are you ready for Chart Summit this Saturday??? I've never been more excited to attend a financial conference in my life. And I don't even have to leave my house!!! And it's FREE. Are you kidding me?
THIS SATURDAY 3/28 8AM-6PM ET
ALL DAY!
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Every month I host a Conference Call for members of All Star Charts Pro. From the feedback we get from our readers all over the world, this one feature of our Membership is a fan favorite.
A lot has happened in the past month. You hear things about interest rates getting slashed to zero, viruses impacting stocks all over the world and many things that none of us could have predicted a month ago. However, Technical Analysis gave us the ability to get out of the way and avoid this entire mess. Not only did we want to buy bonds, but we simultaneously wanted to sell stocks!
Today I want to share with you the video of last month's Live Conference Call. I've unlocked it so anyone can watch it, not just Premium Members. I've gotten a lot of requests to do this, even from paid subscribers, because opening it up serves as a great educational resource for the future. We can all learn from this, myself included.
I was down in New York City this week and dropped by the Nasdaq to chat with my old pal Frances Horodelski on BNN Bloomberg. Frances and I have been rapping about the markets for the better part of the past decade. It was great to chat with her once again.
In this short clip, we talk about the new bull market for stocks, rotation into Emerging Markets and Energy, where we think gold goes and how bad bonds are going to get hit if interest rates get to the 3% mark we're looking for in the US 10-year Yield.
In this Episode of Allstarcharts Weekly, Steve and I discuss the less talked about tenets of Dow Theory. Everyone always likes to talk about the Dow Jones Industrial Average either confirming or diverging from the Dow Jones Transportation Average. But what gets forgotten is that there are many more tenets like Closing Prices are the most important, Identifying the direction of the Primary Trends and The Market Discounting Everything. Check out JC's 5 Most Important Dow Theory Tenets
This day and age we have other areas just as important, or even more important, than a group of Railroads, like what Charlie had when he first wrote down his Tenets in the late 1800s. Today we also compare the Dow Jones Industrial Average to the Semiconductor and Homebuilders Indexes as well as incorporate a series of ratios with Consumer Staples and Financials. It's more of an "and" than an "or" for us when it comes to Dow Theory.
This is a question I get a lot from friends and family or someone I just met that knows what I do for work.
What's funny is that they don't ask it quite like that. They won't ask, "JC how do I make money in the market?", even though that's what they really mean to say. It's usually more like, "Which pot stock do I buy?" or "Which Crypto Currency should I buy?", depending on where we are in the cycle. It's rarely an IF, and more of a Which One?
The way I see it, you can add the same amount of money every month for decades and just let it compound. If you're disciplined enough to do it (most of you aren't), I can see a good case for that strategy. But if you're looking to get into more specific trades or investments, I think a well-defined risk vs reward strategy is the only way to profit. If you can't manage risk responsibly you'll be gone soon.
One question that I get a lot comes from new investors, "Hey JC, I'm starting to get into the market for the first time, any advice?"
For me, I'm convinced you have to get kicked in the stomach, at least once, but likely even more than that, to finally understand the importance of Risk Management. But if you can somehow figure out a way to just take my word for it, and eliminate your emotionally driven decisions completely, I believe it puts you way ahead of 99% of market participants around the world.
