As you guys know I've been pounding the table bullish of stocks for a long time. Not just U.S. stocks, but globally including both developed and emerging markets. This aggressively long approach is nothing new to us. Along the way, however, I've tried to point out some of the things we've been watching closely as a warning that a bullish thesis is most likely wrong. Again, it's not so much about how high we think a stock or sector or index can go, but at what point are we wrong? What's the risk? is the more most important question.

A wise Egyptian man once taught me, "If you trade the averages, you'll get average returns". The media likes to focus on what "The market" is doing today?". People want to know, "What did the market do today?". It's just how we are and how we think. But it's not the best approach, in my opinion. Far from it.

This is not a stock market, it is a market of stocks. There's a difference. It's funny how many people have tried shorting the major US averages over the past couple of years only to see sectors rotating and a majority of the components holding them up. While some sectors go through corrections, another one steps up and leads the averages higher. Sector rotation is the lifeblood of a bull market. This one has been no different.

Every month I host a conference call for All Star Charts Premium Members where we discuss ongoing themes throughout the global marketplace as well as changes in trends where new positions would be most appropriate. This includes U.S. Stocks & Sectors, International Stock Indexes, Commodities, Currencies and Interest Rate Markets.

We've been bullish towards US and Global Stocks as they remain in strong uptrends on any sort of intermediate-term time horizon. I still think this is an environment where we need to be buying weakness in stocks, not selling strength. The weight of the evidence is still pointing to an increased amount of risk appetite, not risk aversion. We will go over a multi-timeframe approach on this conference call where we will start with the longer-term and then work our way down to more short-term to intermediate-term investing ideas. This will also include other assets like the US Dollar, Euro, Gold, Silver, Crude Oil and Interest Rates.

Since September we've been in the camp that the US Dollar is heading higher and potentially a lot higher. So if you want to be long the US Dollar, that is one way to take advantage of it. Short Euro has been another. But my favorite has been to be short the Gold Miners, particularly the more vulnerable Junior Gold Miners $GDXJ. So far this is working well. But I think it's worth reiterating that we, in general, want to approach the marketplace within the context of what we think will be a rising US Dollar environment.

Today we're taking a closer look at what's going on here:

It is such an incredible blessing to have monthly candlestick charts of all the markets around the world at our disposal. It's essentially free data which is easily organized into a visual format to help us identify the direction of the underlying trends. It doesn't matter what your time horizon is, the monthly candlesticks offer a longer-term perspective from which to begin your analysis. From there is when you work your way down to more intermediate and shorter-term time horizons, but keeping the direction of the underlying primary trends in context.

I have a massive workbook of Monthly Candlestick charts that I review at the end of every month. I do not even open this workbook in the middle of the month. The fact that I only look at this workbook 12 times a year forces me to always come back to the primary trend, not allowing me to forget it. This exercise really helps me stay true and keeps me honest. It is easily one of the most valuable parts of my entire process.

These are some of the things that stood out to me the most:

The Nasdaq 30 is an equally-weighted index that I created which consists of the 30 largest stocks in the Nasdaq. Collectively these 30 companies represent over half of the entire market capitalization of the Nasdaq Composite. So just like the Dow Jones Industrial Average is a good gauge of stock market strength, I feel that my Nasdaq30 Index offers similar insight but for different types of companies.

Today we’re going to do a deep dive into these 30 Nasdaq stocks. As always I walk through them on both weekly and daily timefames. We want a longer-term structural perspective and then break things down to more tactical time horizon for execution purposes. Then we look at them collectively to weigh whether there is more good or more bad so we can make better, evidence-based decisions.

Here are a few things that stood out to me:

Every month I host a conference call for All Star Charts Premium Members where we discuss ongoing themes throughout the global marketplace as well as changes in trends where new positions would be most appropriate. This includes U.S. Stocks & Sectors, International Stock Indexes, Commodities, Currencies and Interest Rate Markets.

We've been bullish towards US and Global Stocks as they remain in strong uptrends on any sort of intermediate-term time horizon. I still think this is an environment where we need to be buying weakness in stocks, not selling strength. The weight of the evidence is still pointing to an increased amount of risk appetite, not risk aversion. We will go over a multi-timeframe approach on this conference call where we will start with the longer-term and then work our way down to more short-term to intermediate-term investing ideas. This will also include other assets like Gold, Silver, Crude Oil and Interest Rates.

Consumer Discretionary has to be one of the most important sectors in the U.S. With Consumer Staples taking a nose dive recently, especially relative to the S&P500, the approach has certainly been "risk on". Severe underperformance out of the Staples historically comes within an environment of rising stock prices. Consumer Discretionaries are typically a beneficiary of this appetite for risk towards equities.

Today we are taking a deep dive look at Consumer Discretionary Stocks pointing out the good, the bad and the ugly. This is a great area to focus on right now because are monster stocks in very clean uptrends as well as disasters that can still be shorted.

We've been on the right side of the trend for stocks. A big reason for that was because of our focus on the Banking sector. Financials are one of the most important sectors on earth and it's hard for stocks as an asset class to fall if Bank stocks are healthy and breaking out to new highs. It's that simple. Pull up a 100 year old chart of J.P. Morgan $JPM and overlay the S&P500 chart. They look exactly the same. We want to always keep that in mind for future reference.

After such a nice run in stocks, and in Financials specifically, I think it's time to take a closer look at what is going on. Have we come too far? Or should we be expecting another leg higher? Rather than focusing on the sector ETFs or sector indexes, let's turn our attention to the actual components of this space. This weight-of-the-evidence approach is much more reliable and efficient than simply looking at an index representing that group. 

You guys know how I feel about equities. We've been on the right of the trade while all the gloom-and-doomers and noisemakers are pulling their hair our of their heads trying to figure out why stocks won't fall. To me, it's been fairly clear: Stocks are in uptrends and that's what stocks in uptrends do, they go up. This has been the trend globally, domestically, large-caps, small-caps, you name it. Talk about breadth expansion, I couldn't tell you the last time I saw this much broad participation out of equities. I encourage you to go through the Chartbook and look through all of the International Stock Indexes, U.S. Averages, Sectors, Dow Components, Transportation Components and additional Stocks of Interest.

A lot of people seem to be bearish of stocks. Some think they can go higher. But I think they can still go a lot higher. This was the point that I was making on our Conference Call 3 weeks ago. The information coming in since then continues to confirm all of the things we wanted to see. While I was pounding the table to be buying I also pointed to a group of things we wanted to see happen to make sure we were in the right direction. This included US Bank Stocks rallying with US Interest Rates, and Gold and Bonds falling. We wanted to see Europe break out along with U.K., rather than rolling over creating a big mess out there. Nikkei needed to recover and stay in a bullish range in momentum. Every single one of these things happened. So yes, I absolutely think we can still go a lot higher in stocks.