From the desk of Tom Bruni @BruniCharting

This week I saw two different charts floating around that I thought deserved a second look based on how they were presented and what their ultimate conclusion was.

The first has to deal with the underperformance of the Equal-Weighted S&P 500 Index, while the second looks at High Dividend Factor ETFs that have gone off the beaten path.

I can't believe I'm publishing the 100th Episode of this podcast that I started in the summer of 2017. My first guest ever was Ralph Acampora! I mean, how could it not be right? Since then I've had the privilege of interviewing Portfolio Managers, Traders, Analysts, Best Selling Authors and even a World Series of Poker Champion! People all over the world have approached me how much they've learned from listening to the podcasts. It's been an amazing experience for me all around.

From the desk of Tom Bruni @BruniCharting

One of my favorite tasks each week is putting together our "Top 10 Charts" of the week report for Institutional Clients.

This week was very macro and intermarket focused, but one stood out as particularly interesting so I wanted to pass it along.

In case you missed it yesterday, we're selling stocks up here and buying bonds.

I tried to outline the levels as best as I could. Let me know if you have any questions!

Quickly today, I just wanted to point out one chart of Emerging Markets that really stands out. Remember this Index is broken down as follows: China 32.40%, South Korea 11.84%, Taiwan 11.71%, India 8.13%, Brazil 6.78%, South Africa 4.25% & Russia 3.84%. 

It's basically 72% Asia and 10% Latin America.

Here's what it looks like:

I like to keep an open mind. When the data suggests getting more aggressive towards stocks, that's what we're going to do. When the data points a more defensive approach, then that's what we'll do too.

We've had a heck of a run in stocks since the summer, and now I think it's time for a break, at least at the index level. Remember, regardless of overall market conditions there will still always be some stocks going up and some going down. In fact, I think Utilities see some outperformance here and I listed which stocks we want to own. So far they're working.

Anyway, so why the new defensive position? Well, the things we said needed to happen for us to pull back are starting to happen. It's really as simple as that.

Let's get into it:

From the desk of Tom Bruni @BruniCharting

In late August we started to see some signs of a potential bottom forming in Commodities as they approached long-term support with momentum diverging and in October we finally got a breakout.

Today that breakout in the Thomson Reuters CRB Commodity Continuous Index remains intact and the trend in Commodities as an asset class has shifted from one we want to be selling rips to one that we're buying dips.

From an intermarket perspective, there are a lot of signals we've discussed that support higher Commodity prices such as the AUD/USD and CAD/USD breakouts, and today I want to share three more data points that have shown up in the last few weeks.

You guys know that I just tell it like it is. I don't care what happens. The stock market can double or can get cut in half. Gold can go to zero tomorrow or to 10,000/oz and I won't care. I'm too old to worry about the economic or social implications of market moves. Been there, done that and it doesn't help. We have to look at everything as objectively as possible.

Now, with that said, I have some thoughts that some of you may not appreciate. But I'm not here to tell you what you want to hear. I'm here to tell you what I'm seeing right? So bear with me.

For those of you who have been around here a while, you remember just how bearish I was towards the US Dollar coming into 2019. The Dollar rolling over was a big catalyst for why we were so bullish of precious metals throughout the first 3 quarters of 2019. It wasn't until September last year that we said, ok it's time to get out.

Sometimes the greatest things in the world are right there in front of you.

Of all the charts I look at and indicators that we include in our process, Consumer Staples relative to the S&P500 has to be one of the most valuable. And for that matter, one of the more simpler tools to use.

Consumer Staples are the things we're theoretically going to buy even if there's a recession or the economy is doing poorly. No matter how bad things get, we're still going to drink beer, smoke cigarettes, brush our teeth, wash our dishes and so forth. Those stocks tend to outperform when the rest of the stock market is falling. Some of the top holdings of the S&P Consumer Staples Index include Colgate-Palmolive, Philip Morris, Procter & Gamble, Coca-Cola and Pepsi.

These stocks represent consumer staples and tend to pay higher dividends and are less volatile than the overall market. We call that "lower beta", because it makes us sound smarter.

Anyway, you can see in this chart how helpful the relative strength in staples has been in identifying trends and turning points:

This week on the podcast I'm thrilled to have Quint Tatro join me as our guest. I've been following his work for a long time and have always appreciated his technical approach to managing portfolios at his advisory firm Joule Financial. This was a great conversation where Quint walks us through how he got to Technical Analysis in the first place and how he applies those methods on a daily basis. We went over the overall stock market and how he wants to overweight International Stocks and Emerging markets heading into 2020. He also likes Gold bigger picture here and the mining stocks that come a long with it. I really enjoyed this one. Give it a listen!

As we head into 2020, we start from scratch with our Q4 playbook and outline our thoughts on every asset class and our plan to profit in the quarter (and year) ahead.

Part 1 of this playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates.

Part 2 of this playbook will delve deeper into Indian Equities, going sector by sector to identify the trends that matter.

Part 3 of this playbook will outline the individual stocks we want to be buying and selling within the context of today's environment.

As we head into 2020, we start from scratch with our Q4 playbook and outline our thoughts on every asset class and our plan to profit in the quarter (and year) ahead.

Part 1 of this playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates.

Part 2 of this playbook will delve deeper into Indian Equities, going sector by sector to identify the trends that matter.

Part 3 of this playbook will outline the individual stocks we want to be buying and selling within the context of today's environment.

As we head into 2020, we start from scratch with our Q4 playbook and outline our thoughts on every asset class and our plan to profit in the quarter (and year) ahead.

Part 1 of this playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates.

Part 2 of this playbook will delve deeper into Indian Equities, going sector by sector to identify the trends that matter.

Part 3 of this playbook will outline the individual stocks we want to be buying and selling within the context of today's environment.