These are the registration details for the monthly conference call held 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 April 17th at 7PM ET. Here are the details for the call:
Healthcare Providers quickly went from hero to zero in Q4 of 2018 after a failed breakout and bearish momentum divergence, but we're beginning to see signs of a potential mean-reversion over the short-term.
Let's start with Healthcare relative to the S&P 500, which has been unable to find its footing since topping 5 months ago. Prices have now retraced 61.8% of their 2018 rally, which may offer some short-term support and transition the trend from down to sideways.
What does it mean when you hear, "Overhead Supply"? How does that help anyone?
The market is a beautiful thing. It's driven by supply and demand dynamics, or buyers and sellers, based on reasons that we don't need to know. I've noticed that the majority of market participants like to worry about the "why?". We choose to worry about the "Where, When and For How Long?". It seems like a much better use of our time, particularly if our only goal is to make money. We're not interested in writing gossip columns.
For me, overhead supply is when there are an overwhelming amount of sellers relative to the amount of buyers around a certain price. Sometimes you get the smartass in the room that says, "Well JC for every buyer there must be a seller". Yes, dummy, but there aren't an equivalent amount of willing buyers and sellers and every price. That's why stocks move.
The market remains a “hot mess", so we’re looking under the surface at breadth and risk appetite measures to identify clues as to the potential direction that this 15-month range will resolve itself.
Today I want to look at one of those measures, Consumer Discretionary stocks vs Consumer Staples.
If you're a long-only fund manager that believes the market is headed higher, you're going to be in more aggressive areas of the market like Discretionary. If you believe the market is headed lower or isn't going to do much, you're going to be in the lower beta, often higher dividend Consumer Staple stocks.
So what's happening in these sectors right now?
The Equal-Weight Consumer Discretionary vs Equal-Weight Consumer Staples continues to struggle with a flat 200-day moving average and confluence of support/resistance, but just made new 6-month highs this week. While this chart still work to do to confirm an intermediate-term uptrend, this is extremely constructive action and is suggesting that risk appetite among market participants is beginning to pick up.
Sean and I have known each other for over a decade but there are still things he's interested in learning about my experiences. In this video, Sean asks me how playing baseball made me a better trader or investor. The key takeaways here are:
1) Hard Work and Mental Toughness
2) Preparation and knowing what you will do under any circumstance
3) Learning how to lose. If you fail 70% of the time on the diamond, you get inducted into the Hall of Fame.
Being able to take a loss and move on is part of the path to success.
The Equally-Weighted Semiconductor Index recently made new all-time highs, while the cap-weighted sits a few below its 2018 highs. What's next for Semis? That's what I hope to answer in this post.
Everyone these days is talking about yield curves inverting. It's the topic du jour, similar to things like golden crosses and 200 day moving averages. The difference is that this one is more intermarket oriented. "Well if this happens to bonds and that happens to rates, then this historically happens to stocks, or the economy". Observing the behavior of one asset class to help make decisions on another is called Intermarket Analysis, or "Cross-Asset" in some more institutional circles.
I don't think there is much more for me to say at this point about the yield curve. The crew over at The Chart Report pretty much covered it all beautifully last week. The short end of the curve (10-year minus 3-month) turned negative, but the long end of the curve did not. The 10s-30s spread is steepening and controlled by free markets vs the fed controlled short end. We've seen this happen before, like in the 90s for example, without it sparking bear markets.
During last week's Conference Call we discussed a lot of the potential catalysts to drive Equities as an asset class higher over the intermediate/long-term, however, we continue to err on the cautious side given our outlook for sideways chop in the short-term.
Thursday I wrote about a growing number of potential "oopsies" (failed moves), so I want to follow up on that post and outline another group of charts that I think are suggesting short-term weakness in stocks.
During last week's Conference Call we discussed a lot of the potential catalysts for a lower US Dollar, so I wrote a free post talking about whether a weaker US Dollar means US stocks have to underperform International stocks. If you haven't read that, please do that first, because in this post I'm going to quickly touch on a short-term theme that continues to build within our Global ETF Ratio universe.
We might be in a rangebound market for stocks, but one thing is for sure: the trend for Technical Analysis is up.
I've had a front row seat to the growth of this discipline and its practitioners for the past 15 years, since first starting my journey. I was half way through John Murphy's Technical Analysis of Financial Markets when I knew this was for me. Things only became more clear after that. As I read through Edwards & Magee and many other books, the way markets behaved just started making more and more sense.
