In this Episode of Allstarcharts Weekly, Steve and I talk about why we want to keep selling gold and buy stocks instead. This trade is working and we don't want to fight it. This has been our base case for months, as you can see here. One of the things that we want to incorporate into our study of price is the positioning of Commercial Hedgers and Speculators, which is published weekly by the CFTC in the Commitment of Traders Report.
In this video I explain how we use this data, why we care, and when to pay attention!
In this Episode of Allstarcharts Weekly, Steve and I discuss the relentless buying pressure in stocks throughout the first half of November. Even when the Dow Jones Industrial Average did not register a positive day, the market didn't really go down either. In fact, we've just seen the two smallest down days in the history of the Dow Averages that date back to the 1880s. This is what we're talking about here. Some might think we're overbought, but I would argue that the overbought readings are just normal characteristics of uptrends. They should be overbought. I still think the Dow sees 30,000.
In this Episode of Allstarcharts Weekly, Steve and I talk about all of the new highs we're seeing on both Weekly and Monthly charts. We've been pointing to the improvements in market breadth in recent months and how we've been getting an expansion in positive participation, not a contraction. This week we started to finally see this work its way into the weekly and monthly charts, but that doesn't change anything we didn't already know. We continue with the breadth discussion by pointing out that the world doesn't start and end with the 52-week highs list. We're seeing breadth improvements in the 21-day high and 13-week high lists and I'm in the camp that we'll ultimately see that reflected on the 52-week high list as well. It's a process, remember:
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!
In this Episode of Allstarcharts Weekly, Steve and I are focused on expansion of global breadth. We're seeing more and more countries around the world breaking out to new 52-week highs. This week the Global 100 Index is making new highs and now Taiwan has also joined the group with Brazil and Switzerland who were already doing so. With Sweden and Japan right there near highs as well, the breadth expansion continues, not the deterioration that the bears are preaching. It's hard to be bearish equities if the Dow Jones Industrial Average is above 27,000 and the German DAX is above its 2015 highs. Those are the key levels we're watching. But breadth is expanding, not deteriorating. That's for sure.
Technical Analysis is the study of the behavior of the market, and therefore its participants. Investors from all over the world come to us for help identifying trends in stocks, bonds, commodities and currency markets. Both Individual investors and Professionals use All Star Charts for trade ideas, global macro analysis, sector rotation work, momentum, relative strength and important price levels for risk management.
When we have to be buying stocks, I'll be there talking about it. When we want to be more conservative and raise cash, I'll be there even louder! I'm fortunate that I'm friends with a lot of the best Technical Analysts in the world. Getting to chat with them regularly makes me a better investor, it keeps me open minded, and most importantly, it keeps me humble.
My friends are really really smart. I don't pretend to be as smart as some of them. My expertise is in bringing it all together and trying to solve the puzzle as best as I can. I'm lucky that I get to do what I love every day.
In this Episode of Allstarcharts Weekly, Steve and I talk about the underperformance of the S&P500 relative to both Gold and US Treasury Bonds. The big question I think worth asking is whether these are massive distribution patterns in US Stocks on a relative basis, or if these are just consolidations within an ongoing uptrend that has been in place for years already? If you're in the bear camp / recession coming crowd, then you would expect these tops to complete themselves to the downside. If you think stocks go on to make new all-time highs (I do), then these are not massive distribution patterns but just healthy consolidation instead.
How are you liking the day to day swings in the market? Is it too much for you? Go through this checklist and make sure these questions are answered before moving forward.
Today, I thought it would add value to take a step back and see what's happening in the market bigger picture. They love distracting you with noisy headlines, but the way we approach it is: Whenever In Doubt, Zoom Out!
Here's how we see things in Stocks bigger picture:
This is a question I get a lot from friends and family or someone I just met that knows what I do for work.
What's funny is that they don't ask it quite like that. They won't ask, "JC how do I make money in the market?", even though that's what they really mean to say. It's usually more like, "Which pot stock do I buy?" or "Which Crypto Currency should I buy?", depending on where we are in the cycle. It's rarely an IF, and more of a Which One?
The way I see it, you can add the same amount of money every month for decades and just let it compound. If you're disciplined enough to do it (most of you aren't), I can see a good case for that strategy. But if you're looking to get into more specific trades or investments, I think a well-defined risk vs reward strategy is the only way to profit. If you can't manage risk responsibly you'll be gone soon.
In this Episode of Allstarcharts Weekly, Steve and I make the bear case for US Stocks. I think we've been pretty clear about the fact that we believe stocks resolve this consolidation since 2018 higher, not lower. But I always think it's important to take the other side and consider the alternative. What will the market environment most likely look like if we're wrong, and we should be selling stocks rather than buying them. I think we brought up some good points here.
In this Episode of Allstarcharts Weekly, Steve and I talk about how the spike in Crude Oil earlier this week is impacting Energy Stocks. When we look specifically at the Oil & Gas Exploration & Production Index, prices broke down below the 2009 & 2016 lows, only to quickly reverse back above. We also saw this happen in the Oil Services Index. Prices of the $OIH broke below the 2001 lows only to get back above it swiftly. I think if we're above 24 in $XOP and 14 in $OIH, we want to err on the long side. If we are in fact seeing a mean reversion in Energy Stocks, I would image Crude Oil will most likely be flat to up in that environment. The levels are set, now let's see how this plays out!
We've all been there and we've all seen others do it to. We get one data point and then all of sudden we're drawing direct conclusions based on that number. Think about how silly it sounds to make decisions based on a government report or even single chart or "technical pattern".
The first thing we need to do is take a deep breathe (We live better when we're breathing). Then we want to ask ourselves, "Ok, this is new data. How does this fit within the context of all the other data points". We also want to identify how much weight we want to put on this particular data point.
It's funny, when I first started studying for Sommelier exams, I caught myself doing the same thing. Instead of looking at the wine, smelling it, tasting it, thinking about what it could possibly be and then coming up with a guess, I was already making guesses just by looking at it. Light body? Pinot Noir!!! Heavy tannin? Napa Cab!!! Low acid white? Viogner all day baby! Wrong, Wrong and Wrong again!
