Earlier this month we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.
In this post, we'll update those charts without going into as much detail as to why they're important. So if you haven't read our initial post linked above, we'd encourage you to check it out.
With that said, let's jump in and see how these charts have developed since.
This is our monthly conference call for All Star Charts India Premium Members where we discuss ongoing themes throughout the Indian Stock Market. We employ a top-down approach and consider the global behavior of the four primary asset classes: Fixed Income, Currencies, Commodities, Equities, before moving into Indian stocks.
From a stock market perspective, we begin by analyzing all of the Nifty Major and Sector/Thematic Indexes, as well as some of our own custom indexes that help us understand how the average Nifty 500 stock is performing. After identifying the clearest trends at the index level, we outline which stocks are best positioned to take advantage of those trends.
By focusing on the core tenets of momentum, relative strength, and market trend, we put the probabilities of success increase on our side. We'll do our best to lay out our weight of the evidence conclusions and walk you through the steps of how we got there!
It's been a month since the first Chart Summit India on April 14, 2020. I've been watching the videos and learning a lot, and encouraging everyone to do so.
We had 20 brilliant Technical Analysts get together online to raise funds to help fight COVID-19. Thousands of people logged in live, and thousands more came to watch the videos later. I have to say that the Technical Analyst community online has some of the nicest people on the internet. They shared valuable knowledge for FREE. This is stuff that's made them money, and has taken them years to learn.
To start the day we had Peter L Brandt, a legendary commodity trader. Peter lives in Arizona, and trades global markets. He's written books, runs Factor LLC, and has traded on classical chart patters in 6 decades. When he talks, I listen.
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.
Normally one day of price action doesn't get our attention, but given our cautious view of stocks from a structural perspective, it's worth outlining why today's candle in the Nasdaq 100 could potentially be a big deal for stocks all around the world.
The weight of the evidence remains mixed and suggests that there will be winners on the long side, winners on the short side, and a lot of stocks in the middle that aren't going anywhere.
An easy way to view that is through our five bull market barometers, which continue to suggest we're in a bear market. As a result, we're focused on the best opportunities on both the long and short side.
In this post, we're going to outline which area of the market we're looking to short and add several individual stock trade setups to our list of open ideas.
Let's start at the sector level. Nifty Commodities remain below the 38.2% Fibonacci Retracement of its 2020 decline at 2,635. With momentum in a bearish range and stuck below this level, then it makes sense to be erring on the short side and looking for a move back towards the lows near 2,075
With Chart Summit India now almost a month in the rearview, I finally found some time to go back and rewatch some of the presentations.
Together with our partners, we hosted 20 amazing speakers and thousands of attendees and raised a remarkable amount of money to fight the COVID-19 pandemic. It was a really great event and an honor to be a part of.
With over 10 hours of content from some of the market's top technicians, I won't be able to do them all justice in just a short blog post so I highly encourage you to go watch all the full presentations for yourself. They can be accessed for free here.
With that said I'll try and do my best. Bruni recently wrote a post about some of his main takeaways from the conference which you can read here. I'm going to build on that today and share some of the things I found valuable from the handful of presentations I recently went back and watched.
When the picture isn't clear on the timeframe you're trading, it generally helps to zoom out one, or even two timeframes above it to gain some clarity around the primary trend.
Today we're going to compare and contrast the action in Gold/Silver and Natural Gas/Crude Oil to highlight this exact concept.
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.
Let's take a look at what's going on in the major asset classes.
Let's start with Bonds. Here's the US 10-Year Note Futures printing their highest monthly close in history, clearly in an uptrend. The Bond market remains in an uptrend both in the US and most markets around the globe.
