Thanks to everyone who participated in this week's Mystery Chart.
A lot of mixed responses from this one. Some of you were buyers at support, while others were erring in the direction of the recent downtrend and looking for a resolution to the downside.
With that as our backdrop, let's just right into it.
I had a great conversation yesterday with Todd Sohn of Strategas, and our very own Steve Strazza, about Sector Rotation. We talked about this rotation, in theory, and also discussed what the current environment is suggesting.
The video of that call will be up shortly on our Youtube Channel. Make sure you're subscribed so you never miss an update! Subscribe for Free here.
The 3 of us were pretty much on the same page that we're getting healthy rotation among sectors and this will likely lead to new all-time highs across the major US Indexes, Sectors and Market Caps. So I asked Todd, what would you tell the Doom & Gloomer out there who is watching/reading this saying to him/herself that we're all completely full of it and the market is about to crash.
Right away he said, "Show them the Equal-weight Industrials breaking out to new highs relative to Equal-weight S&P500:
One industry group we've been getting a lot of questions about is textiles.
In addition to answering each person individually, I thought it'd be beneficial to write an entire post outlining what we're seeing in this area of the market.
This week on the show, Howard and I talk about the value in finding people to synthesize information for you. Howard is one of the best people I know at doing this, and I've picked up a few tricks from him over the years.
We can't be experts in everything. But with new tools and technology, we now have the ability to rely on other subject matter experts to point us in the right direction and give us perspective on how they see the world. I've found this process to be incredibly valuable. I encourage you to try it!
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.
Last week, we followed up on some of the charts we recently cautioned were approaching overhead supply to see how they reacted to these critical levels.
Since we experienced a bit of a selloff on Thursday and Friday, this week we’re going to keep it simple and take a high-level look at some of the most important assets in the world and assess any damage that was endured...
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.
Welcome to this week's edition of "Under The Hood."
What we do is analyze the most popular stocks over the trailing week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We are using a variety of new 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 the 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.
What's the bear case for equities if Financials start to outperform for the first time in, what feels like, forever?
A funny thing happened this week. The Nasdaq, as well as some of the major Large-Cap US Indexes, were under pressure for a couple of days. But did you realize which which sector was the best performer during that selling?
Financials.
Wait, what? Relative strength in Financials?
Looking at this a little deeper, if Financials were ever going to start to outperform, this would be a perfectly logical place for that to start. In fact, this is exactly where they started to outperform after the Financial crisis:
Energy stocks and Crude Oil have been trending in opposite directions over the trailing three months.
We know these kinds of intermarket relationships can dislocate for extended periods of time, but some recent developments in the space have us thinking it may be time for this divergence to correct itself... and it's likely to come in the form of Crude catching down as opposed to stocks catching up.
In this post, we'll reveal this week's Mystery Chart and discuss what the recent action in Oil could mean for Energy stocks in the weeks/months ahead.
There are a lot of distractions in the market, particularly when it comes to news events that drive a stock quickly in one direction or another.
In this post, we want to look at the example of Reliance and Future Retail Ltd. to reiterate why it's best to focus on process rather than outcome when it comes to markets.
