We are in the tricky part of the quarterly cycle where upcoming earnings warrant caution on options trades in individual names. Premiums get elevated ahead of the uncertainty heading into each earnings event, so that makes being long premium an undesirable idea. Meanwhile, it makes me uncomfortable getting short elevated premiums into these events because of the risk of an outsized move blowing through any short strikes I may have on.

And of course and ironically, with summer in full swing, broader indexes are seeing declining volatilities which makes it tougher to put on good credit spreads.

But your boy hasn't given up looking for opportunities, and I see a good one shaping up in the Utilities space.

The Nasdaq 100 just hit another all-time high, as did the amount of people quoting the percentage of the index's gains that are from its top five components. While that makes for a good headline and soundbite, it's not really all that actionable. What is actionable is the chart below, which we spoke about in early June.

There are 51 stocks down since the Nasdaq 100's initial peak on January 26th, meaning there is opportunity on both sides of the tape if you're so inclined. What it also tells us is that it doesn't pay to get ideological about how large components like Apple, Amazon, and Google have become. It's a cap-weighted index, which means that as long as the leaders keep leading the index is going to move higher. When their performance deteriorates, as will the index's; it works on the way up, and the way down. It's just math.

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It's been quite a few years since I did these youtube videos, but with the help of technology and a solid team, this is something we can start doing again on a regular basis.

Here is the first video with a throwback to the old days and then we get into Consumer Discretionary stocks and why I think they will continue to be a leading indicator for the overall market. 

Large-caps in India have been on a tear relative to their small and mid-cap counterparts, which we've spoken about at length over the last few months. With that said, it's no surprise to see that the Nifty 50 is leading to the upside once again by clearing its recent range on an absolute basis and making new 5-month closing highs.

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

Perhaps it's the overwhelming number of afflicted Bears coming in to emergency rooms, pharmacies (for pain meds), and therapists couches across America that is fueling the continued bull market in healthcare stocks? Interesting thought.

But we're not fundamentalists here, we just follow price action, volume, and with our options trades -- volatility. And those three things are pointing to a great opportunity for profits in the $XLV Healthcare ETF.

Some people look at Utility stocks doing well as something negative. I never understood that. They suggest that an uptrend in a sector that is looked upon as "defensive" is not something characteristic of a stock market that is going up. But, in fact, it is. With Utilities pressing against all-time highs again, now is as good of a time as any to remind ourselves that they indeed move with the overall stock market over time.

From the desk of Tom Bruni @BruniCharting

In 2018 the trend of small-cap Healthcare out-performance over its large-cap counterparts accelerated aggressively, with the small-cap ETF $PSCH returning 30.50% YTD and the large-cap ETF $XLV up a meager 1.70%.

Click on chart to enlarge view.

Despite XLV's under-performance relative to small-caps and the broader market, some signs of improvement have been developing over the last few weeks. As we can see in the ratio of $XLV / $SPY below, prices retested their 2017 lows as momentum diverged positively. This suggests at the very least we don't want to be short on a relative basis.

On an absolute basis $XLV made nearly 4-month highs last week and is attempting a breakout after 6 months of consolidation. A close above 86.60 would suggest prices are heading to our next upside price target of 101.30. We also want to see momentum get back into overbought...

Jack Dorsey, CEO of both Square $SQ and a little-known company named Twitter $TWTR, is having a pretty good year. How good? Well, in the last 365 days, $SQ is up 177% and Twitter is up a more modest 158%. Boy, the sentiment in these two names sure has changed. It seemed like just yesterday Jack Dorsey was America's most hated CEO. "Pick one!" the masses screamed. Everyone thought he had taken on too big of a workload as the stocks of both companies languished in prolonged downtrends. Amazing what twin upward trending stock prices can do for Public Relations.

While both stocks look compelling here, we're going to take advantage of some attractive volatility being priced into $SQ options and an earnings event to play both sides against.

For months we've been focusing our long efforts on stocks in sectors like Fast Moving Consumer Goods that have been showing relative strength. Today we're revisiting the Consumer Goods sector as it makes new all-time highs on an absolute basis and nearly 1-year highs relative to the Nifty 500 to see what names we want to be involved in to capitalize on this theme.

Click on chart to enlarge view.

Here is a look at the Nifty Fast Moving Consumer Goods Index on an absolute basis, showing prices marching toward our price target of 30,710 after two months of consolidation.

Here is a list of Consumer Goods stocks we want to be buying. You'll notice that many of them have been discussed in our posts before, but are listed here because they continue to show relative strength and well-defined reward/risk opportunities.

I just got back from a vacation in the south of France and northern Italy. I've written in the past about the benefits of getting away and the positive impact it can have on decision making and portfolio returns. If you have the discipline to stay away from your computer during a staycation, that works too. I personally cannot help myself but to go check out some charts if I know I have access to the computer. So I need to get out of town. This year we chose Europe.

Ever since first studying Fibonacci in 2005, I knew his statue was somewhere in Pisa. The trouble was finding it. There isn't much information out there. Some of you have been asking me about this for your upcoming trip to Italy or just keeping note of it for the future. So I figured it would help to just lay it out there as a reference for when you need it.

Also See: Fibonacci In Trading

This is Part 2 of the 3rd Quarter Playbook for Members of Allstarcharts.com and focuses more on the Global Macro and Intermarket composition of the current environment. For more US Sector and Stock specific analysis, see Part 1.

Now that we're halfway through the year, it seems like an appropriate time to review market breadth both globally and within India to identify how we want to be positioned in equities during the second half of this year. In this post we'll do just that by looking at all of the global equity markets and Nifty sectors we track to determine their trend and momentum readings across multiple timeframes, so that we can come to a conclusion based upon the weight of the evidence.

With two weeks to July expiration, it's time to review our July positions that will be expiring soon and take any actions that are necessary to reduce risk or take profits. This is the time of the cycle when the theta cost of our long premium plays will start to accelerate against us, or the gamma risk in our short premium plays will start to ramp quickly against us. No bueno in either case.

From the desk of Tom Bruni @BruniCharting

Throughout April and May we've discussed market breadth improvements that have us bullish on equity prices both in the US and globally. Today I want to perform a simple exercise to see how the data we're looking at has developed over the last two months or so of trading.

With earnings for Apple coming up on July 31, there's just enough time, worthwhile juice, and a significant price level to lean against in order to potentially bite off some quick profits in $AAPL while limiting our downside risk. Since we don't have much time, lets cut right to the chase...

It is an honor to introduce the latest addition to our team here at Allstarcharts, Tom Bruni.

The running metaphors for Nike $NKE stock are too obvious, so I'll do my best to avoid them. However, it cannot be denied that last week's monster gap higher coming out of earnings has launched the stock around the final turn and it is now sprinting towards a big, fat, round number - $100. That big magnet coupled with a pretty common phenomenon called "post earnings drift" following positively received earnings events sets up a pretty compelling case for a profitable move setting up. 

Consumer Discretionaries have been a great indicator of market strength for a long time. This has been the best performing sector off the 2009 lows by a long shot, nearly doubling the performance of Tech, which has also been a monster. Discretionaries broke out to new highs in early 2012, well before the S&P500 and Dow Jones Industrial Average. With this sector breaking out to new all-time highs last month, it's hard to be bearish stocks.

This is Part 1 of the 3rd Quarter Playbook for Members of Allstarcharts.com and focuses on the U.S. Stocks Market. See Part 2 here.

Last month we introduced the newly added Monthly Chartbook in a post where we discussed the trends and perspectives seen through a long-term lens. Our conclusions were that many of our price objectives for the Nifty Sectors and Indices were hit and that a neutral approach was best in many cases. In that type of environment we wanted to focus our long trades in areas showing relative strength like large-cap Financial Services, IT, and Consumers Goods, while focusing our short trades in areas that were showing relative weakness, like mid and small-cap Infrastructure, Realty, and Metals stocks.

Register here for our live monthly conference call for Premium Members of All Star Charts India.

July's Strategy Session will be held on Wednesday, July 6th at 7 PM IST. As always, if you cannot make the call live, the video and slides will be archived and published here along with all of our past conference calls.

Here are the details for Tuesday:

Next week I will be sending out our Q3 playbook. Email me if you're not already a Premium Member. There are so many interesting things happening right now that I think there will be plenty of opportunities to make money next quarter, despite it supposedly being a slower time of the year.

When months close at 4PM ET, I can't help myself but hit those monthly charts right away. I am very disciplined about never looking at them before the month is completed. You get into bad habits like that. So I look forward to the monthly candlesticks being done:

Let's get right into it:

...FEED them.

Continuing with a theme that emerged for us this week, we're taking recent volatility climbs as a gift to help us get through a typically slow summer trading period. Weeks like this one -- just ahead of a holiday week -- are the kinds that level-headed premium sellers wait for when putting on their "income trades."