In this episode of the Money Game Podcast Phil and I talk about the stock market making all-time highs while sentiment points to very few bulls. This is an interesting dynamic where the behavior of the market is pointing to one thing and the behavior and emotions of society are saying something different. I've been in the camp that this negative sentiment unwind is precisely the catalyst to take stocks much higher, not just in the U.S. but around the world. It's very rare to have stocks this strong, yet so few people betting on higher stock prices. It's pretty awesome. We also talk about the deterioration, or at least an end to the expansion we're seeing, in the upside participation in stocks. We're seeing MORE stocks, sectors and global indexes participating to the upside, not fewer. Until that stops, we want to keep looking for stocks to buy.

From the desk of Tom Bruni @BruniCharting

On October 26th I had the privilege of speaking at the Trade Ideas 2019 Summit in San Diego. It was a great opportunity to share our views, but more importantly, meet a ton of new people from all walks of life and hear their different perspectives. I had an absolute blast.

Last year JC presented at the same conference, outlining our very bearish thesis for Equities. This year my tone was the exact opposite!

I only had thirty minutes, but I ran through nearly 100 slides of Equities, Commodities, and Interest Rates, outlining our bull case for Equities.

The full video is available below and you can email info@allstarcharts.com if you'd like the full slide deck. Hope you enjoy!

Stocks around the globe have been making new highs as of late, rallying over the past several weeks and months.

Will it continue or are we due for some consolidation first?

Let's take a look.

Going through charts this weekend, there are a few things that stood out.

First of all, the biggest company in the world is on pace to easily double in value in 2019. How do you think things are going around here? My bet is pretty darn good:

Robert Sluymer has been a Technical Analyst for close to 3 decades. I really enjoy his intermarket, global macro perspective and the way he brings it all together in a similar way to what we do at our shop. It was hard for me to really disagree with anything Rob said during this podcast episode. It seems to me like him and I are on the same page on many levels. I didn't make it easy...

What do we know about all-time highs? They are not a characteristic of a downtrend. New all-time highs are things we see when we're in a market environment where it is more advantageous to be buying stocks rather them selling them. This is what we have today, whether you like it or not.

The market doesn't care that you don't like the president. The market doesn't care that you think this is only because of buybacks. The market doesn't care that you think this is fed driven. THE MARKET DOES NOT CARE WHAT YOU THINK ABOUT ANYTHING.

EVER.

Anyway, on Halloween we got new all-time monthly closing highs in the S&P500, Dow Jones Industrial Average, Global 100 Index, Nasdaq Composite, Nasdaq 100, S&P 1500, Dow Jones Composite Average, Consumer Discretionary Index, Technology Index, Semiconductor Index, US Real Estate Index, J.P. Morgan Chase, Microsoft, Apple, Google, the Europe Hedged Index Fund and Brazil's Bovespa, among many others.

Are these reasons to now all of a sudden start selling stocks? My argument is no.

This is a lesson I had to learn the hard way for sure. Early in my career I used to always want to be trading the Russell 2000 or the Nasdaq and sometimes even S&P futures. Some people can do this successfully. Most cannot.

A wise Egyptian man once taught me that, If you trade the Averages, You'll Get Average Returns. This made a lot of sense to me when he first said it, because I didn't have great experiences with that strategy up until that point.

The reason I bring this up today is NOT to convince you not to trade the index ETFs or Futures. You do what you have to do! The point of this post is as a reminder that we use Technical Analysis to identify trends. These trends are in all asset classes - Stocks, Bonds, Commodities, Currencies, Interemarket relationships, Crypto and others. Once we identify the trend, then we can figure out the best way to try to profit from its theme of rising or falling prices.

We've been in the camp that US Stocks have been in a sideways range since January of 2018, over 21 months. You can call this a cyclical bear market. You can call it a sideways range. Pick your preferred nomenclature and let's move on. 

From the desk of Tom Bruni @BruniCharting

Saturday I spoke at the Trade Ideas Summit in San Diego, outlining our bullish case for US Equities. It was a lot of fun and you can register here to receive the presentation replay when it becomes available.

Today, JC followed up on our recent posts by confirming that new all-time highs are indeed not a characteristic of a downtrend.

In honor of the new all-time closing highs in the Russell 3000, S&P 500, and Nasdaq 100, I want to outline several stocks we want to be buying to take advantage of our bullish Equities thesis.

For those who didn't check the market today, here's the Russell 3000 making a new all-time closing high, just shy of its former intra-day high of 178. New highs are not a characteristic of a downtrend, so as long as prices are pressing above 178 our upside target is 196 in the coming months.

Click on chart to enlarge view.

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We've done the homework. New All-time highs are NOT a characteristic of a downtrend. Go back and check for yourself. I was just listening to the great Brooklyn poet Shawn Carter who inspired the headline. It's true. This is not a bear market, by definition. So should we be looking for stocks to sell or should we be looking for stocks to buy?

Have you noticed that with Tech and Software and other areas grinding sideways or lower, we've seen a consistent bid in Emerging Markets? Have you looked at Brazil lately? The last thing stock market bears want to see is rotation into these serial underperformers.

I don't think this is a tiny story either. I think there is a much bigger theme going on here that would be irresponsible to ignore. First of all, let's make something clear. Copper prices and Emerging Market stocks move together. You can't argue with me on this one.

Copper doesn't move with the "economy". Copper doesn't move with the S&P500. Copper is not a "Dr." of any kind. Copper moves with Emerging Markets. Period:

If we want to know what the largest institutions in the world are doing, we have to look at the biggest stocks. If you have 100 Billion Dollars to put to work, you're not buying crypto currencies or pot stocks in Canada. The big boy sandbox is where we want to look.

My friend Todd Sohn says that your best players are supposed to score a lot of your points. The S&P500 is a cap-weighted index, which means that it owns more of the stocks performing well and less of the ones doing poorly.