For those new to this exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
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.
We've explained how we continue to see the weight of the evidence shifting in favor of the bulls with each passing week.
We can finally say we're no longer in a split market environment. Instead, we see a market supported by strong internals where the bias is clearly higher for equities and risk-assets alike.
After the prior week's resurgence from the Tech/Growth trade, as well as new highs from many of the major sectors and indexes, this week showed a strong rotation back into cyclical groups.
The Dow Jones Industrial Average just went out at new All-time weekly closing highs. The way I learned it was that, "We Don't Want To Fight Papa Dow".
One thing we know for sure about new All-time highs is that they are NOT a characteristic of a downtrend. When you go back and find all the best downtrends ever, you're not going to find many new all-time highs in those trends. In fact, you won't find any.
And as a public service announcement, if you're one of those people who approaches life with the mentally that all downtrends start with new all-time highs, please unsubscribe. You're clearly not listening to anything I'm saying and it's probably just better that you go away.
For the rest of you who finished 3rd grade math class successfully, here's the chart of the Dow Jones Industrial Average making new all-time highs:
Welcome to our "Under The Hood" column for the week ending November 13, 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.
Over the years, Diwali has become one of my favorite Indian festivals!
As I've come to understand it, Diwali symbolizes the spiritual victory of light over darkness, good over evil, and knowledge over ignorance. Those are all things I can get behind.
So from all of us here at Allstarcharts, may the candlesticks illuminate your charts for another year!
It's been a homerun since showing all that relative strength back in February and March. It was even part of our Coronavirus Index. But I think it's now time for another leg higher to get going.
If $DPZ is above 370, we want to be long with a target up near 600. You can find our analysis on the space here.
Here's my attempt at Fundamental Analysis on Domino's. How'd I do?
The Top/Down approach to markets is at the core of what we do at All Star Charts. That means starting at the asset class level and peeling back each layer to refine our view of the smaller components that make up that asset class. With each new layer, we discover information that helps us form our weight of the evidence conclusion.
That brings us to our weekly column, The Top/Down Take, where we hope to educate readers on how we execute this process and highlight its value through the analysis of popular stocks.
Before we start, just want to give a big h/t to our intern @GrantHawkridge for helping out bigly with this research and post.
Some might even call this post a...JOINT venture.
We'll be here all week.
Now, let's get into the charts.
First, let us start at the industry level with the Alternative Harvest ETF (MJ). There is nothing bullish about this chart and made no progress in 2020. Prices have re-tested resistance multiple times, however, each time sellers came in and defended that level.
For now, the benefit of the doubt goes to the bears as this is a sideways trend at best, at least until prices can get above this 15-16 range.
Is it time to buy the Travel, Leisure & Entertainment stocks?
I don't necessarily think we need to own all of them. But if we focus on the ones with the most relative strength and positive momentum, we should be in a much better position to succeed. In other words, if we can find the ones that don't look like most Travel, Leisure & Entertainment stocks, then we could have a winner!
First of all, here is the Dow Jones Travel & Leisure Index (can't trade it) overlaid with the Leisure & Entertainment ETF $PEJ (can trade it) so you can see how similarly they move. I also included some of the fun facts about $PEJ from the Fund Factsheet.
