Eyes are on the Gold Market. All-time highs do a great job of getting everyone's attention, especially if it hasn't happened in a while. We're going on almost a decade since precious metals hit their peak and completely collapsed. As bad as Gold did, Silver really got destroyed. To put things in perspective, from the March 2020 lows, it will take a 328% rally in Silver just to get back to where it was in 2011. 

Today, let's focus on Gold. Are we going to make all-time highs? What is the all-time high? Do we look at weekly charts, monthly charts, daily charts? What actually is "The All-time High in Gold?".

First, let's keep in mind that this conversation would not even be necessary if we priced Gold in any other currency outside of the US Dollar. The Dollar strength, which is the denominator in this Gold conversation, has held it back, compared to what it's done priced in other denominations.

Look at this table showing all of them already making new highs:

So why should...

Yesterday's post on "Pulling The Weeds" from our portfolios got some great feedback, so thank you for that.

It also prompted a question about whether we should be adding Equity exposure as the indexes go higher or if we should be lightening up and trying to add back on weakness.

This is a very personal question that'll look different for everyone in practice. In this post, I want to provide a framework to use when thinking about this so you can identify what's most appropriate for your portfolio.

Remember, our job as Market Technicians is to ask the right questions and then allow the market to tell us the answer.

Believe it or not, there's a "tech" stock out there that is ripe for a short trade.

I know, I know.... shocking. I was surprised too.

And it's offering a nice bounce to sell into today, so let's get to it!

Our view remains that this is a new bull market in stocks, so we want to continue using any weakness towards 10,000 in the Nifty 50 to be adding exposure. With that said, just as we would pull the weeds out of our garden periodically to keep it healthy, we want to do the same with our portfolios.

And what better time to review your portfolio than at the end of the quarter?

In this post, we're going to show a few examples of stocks that remain out of favor...and their characteristics, so that you can identify any of the weeds in your portfolio and determine the best course of action for them.

From the desk of Steve Strazza @Sstrazza

New Mystery Chart!

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?

In this episode of The Money Game, Phil wanted to talk about the importance of exercise. He compares the human mind and body to auto racing and how in order to succeed, the car must be in great condition. For Financial Advisors, Traders, Portfolio Managers and Analysts, we regularly go through very stressful times, and in other cases very boring times. In order to put ourselves in a position to excel, we need to have our minds right. The best way to make sure the mind is in top working order, is to make sure the body isn't being ignored. They work together.

Phil reiterates a lot of points that are probably familiar to a lot of us who focus on physical and mental health, which is fantastic. But for those of you looking for a spark, just to get the ball rolling, Phil offers some advice on easy ways to get started. He also discusses the Height-to-Waste Ratio and what we should be looking for. I thought that was really helpful too.

I encourage you to sign up for Phil Pearlman's FREE weekly newsletter: ...

Last month I shared a video of my Happy Hour with Traders Kimmy Sokoloff and Joe Fahmy. You guys sent in amazing feedback and I really enjoyed doing it. So today, I want to give you a peak at my conversation with Andrew Thrasher and Dan Russo. They both love drinking wine and we've always had that in common, so we discussed some of our favorites as well as our thoughts on the stock market and bond market.

It's cool to be able to sit back and relax with two of the smartest guys out there and hear what they have to say. I hope you enjoy!

A recent favorite among Robinhood traders, Facebook $FB is consolidating near all time highs and put in a clearly defined risk management level last week that gives us a great level to lean against on the long side:

From the desk of Steve Strazza @Sstrazza

For the week ended Thursday, July 2, 2020:

Every week we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Being Independence Day weekend, we're going to highlight the continued structural outperformance from the US vs rest of the world in this week's post. As a good patriot and technician, I would be remiss not to take this opportunity to reflect on how grateful US investors should be.

Here are our US Index ETF and Global Index tables.

Imagine if your retirement or savings account was invested in a FTSE 100 fund over the past year...When you compare the S&P 500 $SPY or Wilshire 5000 $DWC to foreign indexes and International ETFs, the outperformance over the past year is modest at best. Although, if you've been focusing on and investing in the best stocks in the US like we...

About a month ago we outlined that the US Dollar was at key support relative to a basket of Emerging Market Currencies, one of which is the Indian Rupee, and that its upward trend was likely to continue.

After some brief strength following this post, we're seeing the US Dollar continue to weaken...which raises the question of whether it's losing its leadership position against the world's major currencies.

I've learned a lot of things and met some amazing people during my trips to India over the years. One of them is the original meaning of the word "Guru".

You see, in America it definitely has a negative connotation. Most people I speak to don't even know what "guru" actually means. For us, it's usually a charlatan-type that no one likes. They usually know less than most and typically do much more harm to their audience than good. You'll often see them buying twitter followers and spamming your LinkedIn messages.

In marketing parlance, they refer to the "Guru" as the guy (usually male) who they spend all their time on marketing and making them look good. The better and smarter the “guru” appears to be, the more money that comes in, and the more profits for the marketing company, regardless of how completely full of it they actually are.

In America, whenever you hear, "Financial Guru", usually you want to run away as fast as possible.

But the truth is, Guru Purnima is one of the most beautiful concepts I've ever learned about. This unique festival on the...

I find myself on Zoom calls all the time. How about you?

Did you notice that the Communications Index is pushing up against new all-time highs? Did you notice that during the March decline, communications held above their late 2018 lows?

I think all of this points to us paying a little more attention to what's going on in the space.

First of all, check out the Communications Services Index holding above former resistance the past 2 years. That alone is impressive. If we're above 272, there is no reason to be pessimistic about Communications Stocks:

In early May we outlined the "Five Bull Market Barometers" we're watching to identify the beginning of a new bull market in stocks.

If you haven't read our initial post linked above, we'd encourage you to check it out so you understand what the rationale behind these five indicators is.

Now, let's see where these indicators ended the week.

One of the things that really caught my attention during our Monthly Chart Review for June was that the Nifty Auto Sector is approaching resistance on an absolute basis, as are some of the sector's largest components.

In this post, I want to dig into the sector and identify if there's still opportunity in the sector on the long side.

First, let's take a look at the Nifty Auto Index weekly chart on an absolute basis. Prices briefly broke below support at 5,200 in March and quickly reversed, sparking a rally towards resistance near 7,000 where we sit today.

This is a multi-year level of resistance, so we're likely to see some consolidation after a 57% rally off the March lows. For now, 7,000 is the line in the sand. If prices are above that, then Auto's can see further upside towards 9,300, but below 7,000 then there's too much downside risk and opportunity cost in being aggressively long the sector.

Click on chart to enlarge view.

...

From the desk of Steve Strazza @Sstrazza

We haven't talked much about Real Estate $XLRE lately because there really hasn't been much to say. Over just about any timeframe, it's underperformed the S&P 500 $SPY, which we'll illustrate with a ratio chart below.

Price is basically unchanged over the trailing year. The only sectors that have performed worse are Industrials $XLI, Financials $XLF, and Energy $XLE. This is not a group you want to be associated with.

Looking at the chart, you'll notice it's gone nowhere for much longer than just the past year. XLRE has actually been chopping around in a messy range for the better part of four years now!

Premium Members can access all of June's Monthly Candles in our Chartbook, but in this post, we want to outline a few of the ones that stood out to us across the Equity, Currency, and Commodities space.

From the desk of Steve Strazza @Sstrazza.

This is the third edition of our new "Under The Hood" column. Read more about it here.

We are already getting positive feedback on this new strategy from "Mr. Market" as both of our trade ideas from last week's post are now in the top 5 of this week's most popular stocks (measured by the net increase in ownership, week-over-week).

In other words, Robinhood investors have been buying these names hand-over-fist since we wrote about them last week. They've been rewarded for it too as they've both performed very well.

Workhorse $WKHS has really lived up to its name as it hit our price target in a matter of days, and then went on to double again from there. The stock is up about 4-fold since it broke above our risk level near 5 early last week.

Here is a look at the updated chart, with the same exact annotations from last week's post.

Click chart to enlarge view...