When going through my chartbooks this weekend one chart stood out to me, highlighting a theme we've been pointing out to our Institutional Clients that's worth mentioning again.
The Dow Transports are the talk of the town due to their lack of trend on an absolute basis and their underperformance relative to the Dow Industrials, so I want to take a quick look and see if there are any themes we can take advantage of within its subsectors.
I think there is a big move brewing in the U.S. Treasury Bond Market. US Interest Rates have gotten crushed along with rates all over the world. It's not just a U.S. thing, but a global phenomenon.
What if I told you that we can potentially make 50% on a trade with minimal risk. What if I also told you that it's showing tremendous relative strength and positive momentum? Do I have your attention? You'd certainly have mine!
These are the registration details for the monthly conference call for Premium Members of All Star Charts. In this call we will discuss the global market environment and how to profit from it. As always, this will include Stocks, Interest Rates, Commodities and Currencies. The video of the call will be archived in the members section to re-watch any time and the PDF of the charts will be made available as well.
This month’s Conference Call will be held on Wednesday July 17th at 7PM ET. Here are the details for the call:
This is one of my favorite things to do: Forget everything that happened in the first half of the year and start from scratch. It doesn't matter what we did or how we felt in early 2019. It's irrelevant. We're moving forward. This is my Q3 2019 Playbook.
Monthly charts force us to take a step back and identify the direction of the primary trend. By erring in the direction of these trends, we are increasing our probabilities of success. Markets trend. That's why Technical Analysis works. This process at the end of each month is arguably the most valuable part of all the work I do. I can tell you that from the bottom of my heart.
One that definitely stands out here is the Dow Jones Industrial Average going out at new all-time monthly closing highs. This is the highest monthly close in the history of the stock market:
Another interesting one is Gold going out at new 6-year highs:
The good news is the S&P 500 and several other large-cap US indexes are back at all-time highs, however, the bad news is there remains a lack of confirmation from breadth and momentum readings around the world.
Needless to say, it was easier to be buying stocks last month than it is today, but let's avoid getting into the weeds and simply look at the number of markets around the world above their 2018 highs.
Below is a table of the global equity markets we track prices in their local currencies. While there are performance stats from several key inflection points like the January 2018 and September highs in the S&P 500, as well as its bottom on December 24th, we want to focus on the left-most "Change From 2018 Highs" column.
This compares the market prices now to where they were at their highest point in 2018, or in other words, it gives us an idea of what the trend is.
Currently, the median stock market in the world is 6.22% off its 2018 high.
I just finished this week's Top 10 Charts Report for Institutional Clients, but I wanted to carve out two Asian Equity Market charts for this post to highlight a tactical opportunity we're seeing in that part of the world.
