Last week I posted the mystery chartpicturedbelow to see what people were thinking once they removed the biases of knowing the security name, timeframe, or etc. and had only price to rely on.
Most people were on the same page as I am, thinking this is a structural trend change that we want to be buying, not selling. A few people were hesitant and wanted to see more before getting involved, but very few, if any, were sellers.
If you ask 100 people what Technical Analysis is, you might get 100 different answers. In this video I try to explain what Technical Analysis means to me. There are a lot of misconceptions about what it is and what it isn't. I hope I can clear some of that up in this short video!
Every week I go through my chartbooks and think about what should be highlighted as our "Chart of The Week", something that speaks to a theme that people need to know about.
Sometimes I have trouble choosing just one chart, but this week it's a no brainer in my opinion.
For those new to the 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?
What do we know about new all-time highs? We know they're not a characteristic of a downtrend.
I often get that guy that comes to me and says, "Well every new downtrend must start from a new high". Yes, and that must be a great way to go through life.
You see, markets trend. That's why Technical Analysis works. That's why this is so valuable. Because if you can recognize the direction of the underlying trend, you're already way ahead of the pack. The likelihood for a trend to continue in its path is exponentially higher that for it to reverse. A 4-year old can recognize if a chart is going up, down or sideways. It's the adults that have more trouble with this.
As I went through all my weekly charts this weekend, I noticed an interesting underlying theme: New Highs.
We live in a global market environment. There are still people out there who think that stocks in the United States go up or down because of what is happening in the United States. I think in order to properly identify the trend in stocks as an asset class, we have to look all over the world. In this video we do just that!
JC beat me to writing about Interest Rates this morning, but while I came to the same conclusion I wanted to add some additional perspective that shared on Real Vision this past Monday.
While that segment was about Mid-Cap Industrial stock Herman Miller Inc., a big part of that thesis is that we're seeing US Rates begin to stabilize.
The chart I want to share today is the Regional Banks/REITs ratio, which highlights an "Interest"-ing divergence between Equities and the Bond/Commodities markets.
I think there is a big move brewing in the U.S. Treasury Bond Market. US Interest Rates have gotten crushed along with rates all over the world. It's not just a U.S. thing, but a global phenomenon.
Yesterday, the All Star Charts team published a bullish piece on the New York Times $NYT, suggesting the stock has the potential to leap as much as 50% from current prices. For those of us interested in leveraging this bullish idea using options, you'll like what I have in store for you today.