Consumer Staples have been going up. Stocks like Costco, McCormick and Clorox have been ripping to new all-time highs. The Sysco in the Staples sector has even embarrassed Cisco in Technology. It's been a nice run. The question here, however, is whether or not the strength in Staples is evidence of a flight to safety and whether we should be concerned about the overall market? This is a very important question and I want to walk you through my thought process.

Fine. I get it. Businesses making political stances -- whether you agree with the stance or not -- rubs you the wrong way. And sure, aligning with a professional athlete at the center of a hot-button controversy only makes it more cringe-worthy for you. You're entitled to that opinion and I support your right to voice your displeasure. But for the love of all that is sacred in the world of trading, do.not.let.your.politics.or.emotions.get.in.the.way.of.making.profitable.economic.decisions.

Just don't do it.

After a more than 40% year-to-date and 60% 2-year decline, we've been eyeing Tata Motors on the long side for some mean reversion. For the last two months the stock has been range-bound, but the recent breakout has shifted the reward/risk in favor of the bulls over the short-term.

This week's "Chart of The Week" is exploring the potential 20% upside in Tata Motors, however, I want to use this post to explore the rest of the Automobile Sector for potential opportunities.

I think the overwhelming theme here is that there are a lot more stocks I want to buy than stocks I want to sell. Why do we need to over complicate this?

Another thing I'm seeing is the January highs as a reference point. The question is whether or not the market will be able to surpass that former resistance, proving there is more demand than supply there, or if it's the other way around? Are there, in fact, more sellers up here than buyers? We can see this key January pivot point in most of the major indexes: S&P500, Dow Jones Industrial Average, Dow Jones Transportation Average and Russell3000. Can we get through those highs like the Small-caps, Mid-caps and Nasdaq already have?

I believe the answer is in the components. How are individual stocks reacting to those former highs? Are they breaking through resistance or running into sellers and rolling over?

For us, the big question going into the weekend was whether or not the most recent leg higher in U.S. Stocks is the beginning of something bigger, a breakout of epic proportions, or just a major whipsaw that will lead to further selling into September and October, two of the most historically volatile months of the year.

We see various crowds. On one hand, you have the bearish cult who for many reasons have fought this uptrend the whole time. Whether they just missed the last couple of years in stocks or, worse in some cases, missed the entire decade, they've been very wrong. There's even a group who wishes harm on the United States and elsewhere around the world, just because they disagree with decisions being made in D.C. They certainly don't want stocks to rise. And then you have another group, who is indifferent and is just looking for a favorable risk vs reward shorting opportunity and they think this is finally it.

From time to time, a slowly developing opportunity presents itself and in doing so gives you multiple ways to profit -- while also incrementally reducing your risk as time goes along. This type of situation is presenting itself currently in Marathon Oil $MRO.

Continental Resources $CLR has been consolidating in a range just below 4-year highs, and recent price action has brought it to a level where I like our odds for an income trade.

This has been the big theme throughout this bull market: Money flowing into Consumer Discretionary stocks at a more rapid rate than towards Consumer Staples. By our work, this is characteristic of an uptrend in U.S. stocks and has been a great tell for a long time. You guys following along for the past few years know that well. We even nicknamed the Staples underperformance as, "The Most Bullish Chart On Earth" (See May 2017). 

Following up on our discussion from the September All Star Options conference call, we will lay out here the trade in $CME that we presented to subscribers. The stock move is underway, but there is still plenty of meat on the bone and I like the trade even more now.

From the desk of Tom Bruni @BruniCharting

For most of this year we've been writing about the overwhelming amount of bullish evidence for US Equities, however, as part of our "weight of the evidence" approach we're always questioning our thesis (i.e. here and here).

In today's post I want to share that exercise as I perform it, outlining some current concerns and what the market would potentially look like in an environment where stocks as in the US as an asset class are falling. We're going to stick with our top-down approach and start with International Equities and inter-market relationships, then drill down into specific examples that help illustrate what we're talking about.

Stocks are still near all-time highs, volatilities are once again compressed, earnings season is behind us, and some bullish runs in individual names are looking extended. Coming out of Labor Day Weekend, the game plan should be to keep it simple until things change.

The Nifty Financial Services Index accounts for roughly a third of the Nifty 500's weighting. With the next largest components Consumer Goods (13.40%), Energy (12%), and IT (10.90%) ripping to the upside, we know that they'll eventually need to rest, which is why the Nifty Financial Services Index is by far and away the most important chart in India right now.

From the desk of Tom Bruni @BruniCharting

Two weeks ago I wrote about the Canada's Energy markets, but today I want to do a deep dive into the US Energy Markets. In line with our top-down approach, we'll start with Commodities in general, get into Crude Oil and some inter-market relationships, individual sector ETFs, and finally equities with the best reward/risk scenarios.

I'm in Texas all week talking charts and watching college football. I will be presenting at the local chapters of the CMT Association, including Dallas, Austin and Houston. If you're in the area, I invite you to join us one of these evenings for a walk through what we're currently seeing in the market. I'll show you how I incorporate a top/down approach looking at global stock indexes and U.S. sectors & industry groups to ultimately find individual stocks to buy and sell.

Here are the details:

*Note the time for the Dallas meeting has been changed to 4PM ET

August's monthly charts are out for Premium Members, but in this post I want to highlight some of the key changes to, or continuation of, the structural trends that these long-term charts provide perspective on. This 30 minutes per month is some of the most valuable time each month.

This is easily the most valuable exercise I do each month. It takes me half an hour, just 12 times a year. It's the best 6 hours I'll spend in 2018. It helps eliminate the noise by forcing us to only look once a month. It brings us home, to the primary trend. It's easy to get lost in the daily rhetoric. This part of the process helps us completely ignore that garbage and focus on what matters.

Here's what we got this month:

We'll start with the Dow Jones Industrial Average as it tries to make a move above 27,000. There's been trouble just below that from the extension target of the 2007-2009 decline. This retest of former highs comes at a time where the Dow Jones Transportation Average is already in the process of clearing. First, here's is the Industrial Average:

Now here is the Transportation Average. Remember, that when they both make new highs, it is confirming that they are indeed, still in bull market uptrends. It's when one is making new highs and the other is diverging in a different direction that we want to be more cautious. This last happened in Q1 & Q2 of 2015 as the...

This is the video recording of the September 2018 Conference Call for Members of All Star Options

I love incorporating a mix of delta neutral income trades in my portfolio -- especially after a nice run in the stock market that might be due for a pause soon.

50 days until expiration is the sweet spot for income trades, which is exactly where we find ourselves with October expiration. So for the second time this week, we'll be choosing an ETF that has elevated premiums but is stuck in a 90 day range -- the perfect type of candidate for a delta-neutral Iron Condor trade.

This week I'm thrilled to have my pal Todd Gordon on the show. He is what I like to call an "Elliottician", meaning he approaches the market using the Wave principle developed by Ralph Nelson Elliott throughout the 1930s. Todd Gordon, of TradingAnalysis.com walks us through his wave counts for the S&P500, Gold, and Semiconductors. In this episode, I think we demystify and answer some of the questions we all have about Elliott Wave and its practicality.  I encourage you to have the charts with you when you listen to this one because Todd goes over several Elliott Wave counts that will make a lot more sense if you're following along visually. He does a good job of explaining things so you can also go back and listen again with the charts in the future. I hope you enjoy this one. I really did!

Over the last two weeks we've discussed small-caps, mid-caps, and the chartbook updates in depth, though we've not had a post dedicated to large-caps in quite a few months. Many of our upside price targets have been hit in Nifty 50 and Nifty Next 50 names, so I want to use this post to provide perspective on the most actionable long and short ideas today.

Over the last few months we've talked about the diminishing number of short setups as even the weakest sectors and individual names begin to stabilize, however, we're still open to short opportunities. So today I want to discuss what goes into our thought process in distinguishing between stocks that we want to be selling strength in, as opposed to stocks that are stabilizing and not the best candidates to short.

For the purposes of this example we'll talk about two stocks in the Industrial Manufacturing Industry to show that while this is a weak Industry, the individual names to play this theme through are very different.

From the desk of Tom Bruni @BruniCharting

Two months ago we highlighted Deutsche Bank because we felt that price action disagreed with prevailing bearish sentiment around the stock, which created an opportunity for us on the long side. Today we're looking at a stock that presents a similar trade for us, with well-defined risk and 30% of potential upside over the intermediate-term.

From the desk of Tom Bruni @BruniCharting

Last week I wrote about the Canada's Energy markets to introduce our new Canadian Chartbooks (Major Sectors & Indices and TSX 60). In today's post I want to focus on the Banking and REIT sectors, which are showing relative strength and continue to offer opportunity on the long side. Not to mention I've been itching to use this Toy Story pun as a title since JC hired me.

First let's take a look at the TSX Capped REITs Index vs the TSX Capped Composite. It's spent the last 2 years bottoming and is now breaking out above a confluence of resistance. If this ratio is above it, the bias is to the upside with a target at the '15-'16 highs.

Click on chart to enlarge view.

Below is a weekly chart of the...