The iShares Real Estate ETF IYR is up more than 17% from its Christmas Eve lows and sitting just off all-time highs. Can this rally continue and if so, what are the names we want to be buying to take advantage of this theme?
We'll provide our perspective on those questions in this post.
You guys who know me already know that this is my favorite exercise of them all. We only do this 12 times a year. Let's just say that it takes you an hour, if you really want to take your time, that's 12 hours of your entire year. Think about the amount of time you spend each year performing other analysis. As far as I'm concerned, it's not even close. These 6 hours (for me it's 6) are easily the most valuable 6 hours I spend all year analyzing markets.
This process allows us to take a step back, which forces us to identify the direction of the primary trend. It's impossible not to, especially when you're seeing similar themes across Indexes, sectors and asset classes.
There is a reason why Medical Equipment stocks look like Tech stocks and not the rest of Healthcare. They're essentially tech stocks trapped in the body of a healthcare stock. Although they are indeed in the Healthcare space, we need to recognize how they behave, the relative strength vs their peers and then treat them as their own group.
In case you missed it, Medical Equipment stocks went out yesterday at their highest weekly close relative to the S&P500 EVER. This is not evidence of a downtrend or any kind of weakness. Quite the opposite in fact:
When you hear people talking about Dow Theory, it usually revolves around what the Dow Industrials and Transports are doing and whether they are diverging or confirming one another. I want to be perfectly clear that while this is certainly one of Charles Dow's tenets from the late 1800s, this is just one of many, and not even in the top 5, as far as I'm concerned. I encourage you to check out my post: Everything About Dow Theory.
Today, we are indeed going to focus on the behavior of the Dow Jones Industrial Average and Dow Jones Transportation Average. Earlier this week we discussed the Dow Jones Composite, which includes the 15 stocks in the Dow Utility Index as well. For this conversation we're analyzing just the Industrials and Transports.
There are many ways to gauge the strength or weakness of the U.S. Stock Market. For us, there isn't a single "best way" to do it. The advantage we have is that we just analyze all of them. There are over 50 charts in my U.S. Stock Market Indexes workbook alone.
But today I want to focus on an interesting chart that I don't think gets the credit it deserves: The Dow Jones Composite Index. I really like how it represents all of the stocks in the 3 major Dow Jones Indexes: Industrials, Transportation and Utilities. If you want a broad measure of the most important stocks in America, I think this is it.
Picking tops and bottoms in the market is really hard. Some people claim they can do it and we'll let them. It's those types of people who help create the arbitrage between the aware and the unaware.
Markets are rarely ever putting in a top or a bottom. Most of the time they're just somewhere in the middle. For years I've told my friend Josh that his best blog post ever was one from 2012 which he titled, "Tops, Bottoms and Middles".
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 Tuesday January 15th at 7PM ET. Here are the details for the call:
In this post I want to highlight some of the most interesting and/or actionable relative-performance charts from our Global ETF Universe. Whether you're interested in actionable pair trades or simply looking for information about where money is flowing in the world, these charts should provide some good perspective on where various markets stand at the start of 2019.
However, in this post we're focused on the current mean reversion we're seeing in stocks around the globe and how to profit from it. We'll worry about later this year later this year.
The media has been making quite the ruckus about 2018 and the "historic" volatility that the US Stock Market experienced, particularly in the fourth quarter. In this post I want to look at a few simple stats that help to put this past year's performance into its proper historical context, so that we can see whether or not it truly was a crazy year for stocks.
This is one of my favorite things to do: Forget everything that happened this quarter and this year and start from scratch. It doesn't matter what we did or how we felt in 2018. It's irrelevant. We're moving forward. This is my Q1 2019 Playbook.