During bull markets I always get asked about when it's going to stop. I don't get asked about stock market bubbles and unsustainable valuations during bear markets, that's for sure. Those environments come with other kinds of funny questions.
This morning I woke up to one of my college buddies telling me that tech valuations are too high and that this has to be a bubble.
Journalists ask me every day how this can possibly continue. "Too high", they say. "Too fast", they tell me. "Fed Printing", they claim. "It's only 5 stocks!!!"... I can't.
Anyway, maybe this is the top. Maybe we are about to crash. Maybe valuations are too high....
But there's no evidence at all that this is the top. New All-time highs are not characteristic of downtrends. They are things we see regularly in uptrends. In fact, new highs are perfectly normal, and should even be expected in this type of environment.
Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to longer-term minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we're turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.
Introducing the Young Aristocrats. We like to say these are "stocks that pay you to make money". Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
Markets have been rallying across the globe since April 2020, except for stocks that belong to the category of discretionary spending. With the pick up in travel activity breathing life into the entertainment space, there are certain ideas that pop from current setups.
I think this is an important discussion. Which way are rates headed?
Remember, Interest Rates setting up for a collapse was one of the reasons we were so bearish equities in late January, and looking to own bonds instead.
The thought process in January was the following: If 10s are going to break their 2012 & 2016 lows, is that most likely happening in an environment where stocks are doing well? Or are rates collapsing most likely taking place in an environment where stocks are under pressure?
Our bet was the latter. We used rates as a leading indicator.
Today we're doing the same thing. But the data coming in is the exact opposite.
First of all, here are US rates going out last week at new 9-month highs:
Monday afternoon I popped on to BNN Bloomberg to have my regular chat with Catherine Murray. These are always fun because we focus on what actually happening in the market, versus all the gossip that revolves around it.
Remember, we're coming off my Just Buy Them Baby interview with Catherine from July. We got a lot of funny emails from people after that one. But as it turns out, just buying them worked out very well.
From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the relative strength trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.
In last week's report, we outlined how the market was in an incredibly healthy state of order. We've been seeing rotation into SMIDS and Micro-Caps, strong breadth, and a sustained bid for Growth, particularly down the market-cap scale.
This week, we're harping on a similar theme.
The weight of the evidence, particularly from an intermediate and long-term time horizon, looks excellent.
Welcome to our “Under The Hood” column for the week ending December 04, 2020.
What we do is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.
Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.
The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.
All Star Charts is known for its Top-Down analysis. In this process, we begin at the asset-class level to ascertain the best category of investment that matches our reward/risk ratio. This then trickles down to specific instruments of investment on the basis of relative strength and momentum.
Let’s take a look at this procedure in our weekly column, The Top/Down Take, and help you understand our analysis better.
