We've all heard about "Dr. Copper's" ability to gauge global economic growth. What is not discussed as much is that Copper is very highly correlated with Emerging Market stocks, not so much developed markets. With Copper right now setting up for a potentially outsized move, the implications of its direction will likely impact stocks throughout the emerging markets space.
I can't think of a better time to talk about Fibonacci Extensions. The Dow Jones Industrial Average right now is fighting to break through an important cluster of extensions that stem from the last two epic peaks we had in the market: 2000 and 2007. A breakout above 27,000 could spark a new cyclical bull market that we believe falls within the context of an ongoing structural bull market. In other words, this is a more intermediate-term breakout (years) while structurally (decades) we have already been in a bull market since arguably 2013 or even 2016.
In this video I talk about 2 key extensions: 261.8% and 423.6% which is exactly where the Dow stopped going up in early 2018. Was 17 months enough time at these levels before we can move on? Let's discuss:
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.
For over a decade I've been following the annual Technical Analyst Awards each year when they come out. I get excited when my friends are finalists and even award winners.
I am incredibly proud to announce that Allstarcharts Research is the 2019 Winner for Best Fixed Income Research!
Our work was also chosen as a Finalist in 3 other categories:
I was lucky to spend a few weeks in Europe earlier this month meeting with customers, colleagues and old friends. For me it's easy to get up in front of a crowd and talk about the charts that I've been staring at every day for over a decade. I can practically draw them for you at this point. Where I really win is in meeting with investors and traders from completely different cultures both before and after my events. I just got back from a trip to Athens, London, Paris, Amsterdam and Dublin. Between meetings, interviews and presentations, I was able to learn a lot from other investors and gain new perspective on things. That's the point of all this. If we're not going out of our way to learn, then what are we doing?
In this conversation, I sit down with our very own Sean McLaughlin to talk about some of my experiences on the road.
Here is the video from my BNN Bloomberg interview this week. We talk about the implications of a weaker US Dollar, including what that would do to stocks, emerging markets, metals and others. I've been waiting for it all year. But think about it. We've already seen some of the things we would expect to see in a weaker Dollar environment. Gold strong, for example, and an inability for the Euro to go lower. So for me, I think this Dollar fall is just getting started.
A lot of the jokes in my community begin and end with gold bugs. I can't think of any group that has been so wrong for so long. You could have literally been in anything else the past 8 years and made money. It's all good though. What goes around comes around. Gold will have its day again, and I think it could be around the corner.
The US Dollar has been a big focus of ours all year (see here, here and here). The implications of the US Dollar's next move will be felt worldwide. I've been in the camp that the US Dollar Index below 98 is positive for stocks and that a drop in the Dollar will most likely coincide with a rotation into emerging markets and european equities. While the Dollar has remained below 98, it’s been more of a sideways range that anything else. But we may have just seen the beginning of this collapse.
One thing we know about all-time highs is that they are not evidence of a downtrend. With near-record pessimism towards stocks recently, it's fun to watch the ones that are breaking out to all-time highs. I'm not really sure what everyone is so angry about, these long bases are slowly breaking out one by one, not breaking down.
Something we've been pointing to all along is that for the major indexes to take out resistance from the past 17 months, we need to see an expansion in participation to the upside. In other words, more stocks, sectors and indexes breaking out to all-time highs. This expansion of breadth is likely to lead and/or coincide with an upside resolution in indexes like the S&P500, Dow Jones Industrial Average, Global100 Index and many others.
It feels good to be back in the office listening to music and ripping through charts! This is something I love to do. The past few weeks were incredible. I met with a lot of smart people throughout Europe and I'm back with new perspective, new ideas and new friends. You can't put a price tag on those experiences. When people ask me what they should invest in, I can't help but answer with: yourself. Invest in what you're doing and what you're learning. I believe this to be true now more than ever.
Last week I was in London giving a presentation at the local chapter of the CMT Association. We had a great turnout and they asked a lot of really smart questions. I was not surprised at all by the high caliber of attendees, from Analysts to Portfolio Managers and even younger participants eager to learn. It was awesome all around.
Prior to the event I sat down with Alex Spiroglou to talk about how I first got into Technical Analysis and what a normal day at ASC Research looks like. This is the full video of that interview.
Earlier this month I was invited to come speak at the Hellenic chapter of the CMT Association in Athens, Greece. We had a much bigger crowd that I expected. I've had the opportunity to speak at many of the chapters around the world, including all over Asia, North America and Europe. I felt this was one of the better Q&A Sessions we've had. We were able to get the audio so I wanted to share that with you today. Some of the audience questions were not as clear as we would like, so bear with us. Hope you enjoy!
