In this Episode of Allstarcharts Weekly, Steve and I talk about the underperformance of the S&P500 relative to both Gold and US Treasury Bonds. The big question I think worth asking is whether these are massive distribution patterns in US Stocks on a relative basis, or if these are just consolidations within an ongoing uptrend that has been in place for years already? If you're in the bear camp / recession coming crowd, then you would expect these tops to complete themselves to the downside. If you think stocks go on to make new all-time highs (I do), then these are not massive distribution patterns but just healthy consolidation instead.

We've been bullish precious metals since the 4th quarter last year and even coming into 2019. We're not gold bugs, thank goodness. The risk vs reward was just skewed in favor of the long side, for a variety of reasons.

One of those was the fact that commercial hedgers were actually net long. They're never net long, and literally always hedged. For me, these Commitment of Traders reports are usually just noise, EXCEPT when they're at extremes. We want to pay attention when the rubber-band is stretched. And so we did, and Gold ripped!

Now we have the opposite scenario. Commercial Hedgers last month had on their largest net short position in history (345,145 contracts):

Think about how well everything is going this year! The S&P500 is up almost 20%. Bonds are up 22% and even Gold is up 17%! Heck Bitcoin has more than doubled! Can things get any better than this???

Stocks are still trying to break out of this massive range since early 2018. After some selling early this week, the range is still intact. I think this chart of the Global 100 Index tells the story best:

In this Episode of Allstarcharts Weekly, Steve and I make the bear case for US Stocks. I think we've been pretty clear about the fact that we believe stocks resolve this consolidation since 2018 higher, not lower. But I always think it's important to take the other side and consider the alternative. What will the market environment most likely look like if we're wrong, and we should be selling stocks rather than buying them. I think we brought up some good points here.

Raoul Pal is someone whose work I've admired for years, both for his global macro perspective on the markets and the amazing job he and his team have done with Real Vision. I like how they've removed a lot of the conflicts of interest that come with traditional media reporting and the sensationalizing that comes along as a result.

From the desk of Tom Bruni @BruniCharting

Thursday was an important near-term inflection point for several major asset classes.

This post is going to cover what's moving, why we're taking notice, and what it could mean going forward.

It's my favorite exercise each month. There is nothing else I do throughout my entire process that provides as much value as my Monthly Chart Review. Here's what stood out to me this month:

Let's start with Papa Dow. The Dow Jones Industrial Average has gone nowhere for 20 months. Flat for over a year and a half:

Click on Charts To Zoom In

In this Episode of Allstarcharts Weekly, Steve and I talk the relative performance of stocks. When assets are in strong uptrends, they not only perform on an absolute basis, but they tend to outperform their alternatives. With new highs in the S&P500 last month, we've seen nothing but lower highs relative to both Gold and US Treasury Bonds. In fact, on a relative basis, the S&P500 is actually down to its late December 2018 lows. Will they hold or confirm a massive distributive top? I think the resolution will tell us a lot about the strength of the current stock market.

Assets in the strongest uptrends not only do well on an absolute basis, they tend to outperform relative to their alternatives as well. In the case of the S&P500, with new all-time highs last month, we've just seen lower highs relative to both Gold and US Treasury Bonds. This is NOT evidence of a strong uptrend.

The question today seems clear to me: Is the underperformance of stocks relative to other assets "The Divergence" that we'll point to in the future as the heads up that something was changing? Or will we get relative rotation back into equities and this was just a temporary blip while stocks consolidated their massive 2016-2017 gains?

What is the best chart in the world right now? I don't know. I guess that really depends on your time horizon, risk tolerance and overall market goals. These are different for all of us.

Today, I want to share what I think are collectively the 120 best charts. The way I see, there is no ONE chart that can tell today's story. But as a unit, these 120 slides give us a good look at the current market environment.