These are the registration details for the monthly conference call for Premium Members of All Star Charts. In this call we will discuss the global market environment and how to profit from it. As always, this will include Stocks, Interest Rates, Commodities and Currencies. The video of the call will be archived in the members section to re-watch any time and the PDF of the charts will be made available as well.
This month’s Conference Call will be held on Monday May 13th at 7PM ET. Here are the details for the call:
About eight months ago Patrick Dunuwila from The Chart Report introduced me to a new data visualization platform called Koyfin. Two month's later I met Rob, one of the co-founders, at Stocktoberfest West. He walked me through the product and what they were doing and I was sold.
A few months later we had the opportunity to invest and we jumped at it. We loved the product and the team, so it seemed like a natural fit.
Today, Koyfin is an irreplaceable tool that I use alongside Optuma as my main tools for charting and analysis.
I get a lot of questions about how I use it, so I wanted to write a post answering just that.
For those new to the exercise, we take a chart of interest and eliminate the x and y-axes and and all labels eliminated to minimize bias. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.
The point here is to not guess what it is, but instead to think about what you would do right now.Buy,Sell, or Do Nothing?
I couldn't help but see many of the same folks who were happy about Trump's "Trade Deal" tweets when they drove the stock market higher complaining as his tweets sent Futures lower on Sunday night and again today after the bell.
I thought this might be a good time to remind ourselves of something.
With the Chinese Internet Index closing at new 7-month highs this week, have we seen the move already, or are we just getting started?
One thing we know for sure by studying history is that stock prices trend. That's why Technical Analysis works. These tools help us identify those trends. Many academics will tell you that these consistent series of higher highs and higher lows over time are just random. The truth is you can show these charts to a 5 year old and the kid will tell you that yes, this stock is going up, or no this stock is going down. You can even argue that a trend is sideways, but that is trend recognition nonetheless.
It's very clear that markets trend, particularly stocks. They go up over time and they go down over time. A stock making new highs has a higher likelihood of continuing to make new highs vs turning around and beginning a new trend. An object in motion tends to stay in motion, is how Newton taught us. It's the same in stocks, which are driven by e-motion. (See what I did there?)
Over the last two months we've been pointing to many divergences in breadth and momentum, as well as intermarket relationships that add to the mixed near-term signals we continue to see around the globe.
Last week I compared the current environment in US Stocks to that of India's a month ago saying the stage was set, but that all these divergences needed price confirmation before they become actionable.
Canada, like a few other Major Indexes from around the globe, continues to churn around all-time highs. So which way will it resolve?
Let's go sector by sector and see what the weight of the evidence suggests, just like JC did for US Stocks.
First, let's start with the TSX Composite, which continues to hover near its 2018 highs as momentum diverges. After a ~20% rally off the December lows and the presence of a flat 200-day, it would be healthy to see some consolidation at current levels before breaking out
Sayings like these give journalists topics to write about. Pro tip: Most of the stuff you'll read is garbage.
“Sell in May and go away, and come back on St. Leger’s Day”
That's where all this Sell in May stuff came from in the first place. The inference here is that there is no point trading in the summer. All the brokers and fund managers will be out in the Hamptons working on their tans. The original saying suggests that the big boys won’t get back to business until Horse Racing season in England is over in the Fall. The British have been celebrating this day in September since the St. Leger Stakes, last leg of the English Triple Crown, was established in 1776. We Americans like to call this time of year, “Football Season”.
It's that time of the month again. This is when we take a step back, reevaluate everything we just saw the past 4 weeks or so, and come back home to the longer-term charts. Life is easier when we're not fighting big trends. While it's important for us to try and identify price levels that could act as support and resistance, this exercise is to determine whether these assets are going up, down or sideways.
Regardless of our time horizon, I think it's important to take these 30-60 minutes a month to acknowledge the bigger trends. Once this is done, then we can work our way down to weekly and daily charts for execution purposes. I say it all the time - My Monthly Candlestick Review is the most valuable 6-10 hours of work I put in each year.
Last week in our note to Institutional Clients we highlighted the potential for mean-reversion in the relative performance of Small and Micro-Caps, driven by rotation into Financials and Healthcare.
Below is a chart of the Micro-Cap Index (IWC) relative to the S&P 1500, confirming a failed breakdown and bullish momentum divergence. As long as prices are above 0.1405, this ratio looks ripe for some mean-reversion to the upside.
Click on chart to enlarge view.
Same goes for the Russell 2000 relative to the S&P 500, failing to hold its new marginal low as momentum diverges.
While we wait to see whether or not this retest of all-time highs is a successful one, we want to define our risk on the long side in individual names that continue to lead the market higher.
One subsector that remains a consistent source of these setups is Software.
Below is a chart of Software relative to the Technology Sector overall, finding support right where it needed to at our previous price target. Whether prices can get back to their year-to-date highs will be an important tell, but for now the uptrend in this ratio remains strongly intact.