The risks associated with owning stocks are currently elevated.

There are a lot of things I can say, levels I can point out, possible outcomes I can walk you through, all those things. But the one common denominator between all of those is that the risk in owning stocks is currently higher than it normally is.

This is an important time to remember your original investment objectives, time horizon and risk parameters. Before buying a stock, or entering any investment for that matter, these 3 questions need to be answered. I can't answer them for you. But what I can do is show you what we're seeing from an intermediate-term horizon.

Our goals here are to make money this quarter. We care about the coming weeks and months. It doesn't matter to us what the market does next year, and it doesn't matter what it does today. Weeks and Months. That's our focus.

For this time horizon, the risk of owning stocks has been elevated. I believed the weight-of-the-evidence had been leaning this...

As stocks around the globe slump, we're seeing another failed breakout attempt in one of India's largest sectors.

Let's take a look at what it means and what it's going to take for it to finally sustain new highs.

First, let's start with the Nifty IT Index on an absolute basis. Last week prices pushed above resistance near 16,500 to new all-time highs, but momentum diverged negatively and prices are now confirming a failed breakout...suggesting more time is needed to work through this overhead supply and continue its long-term trend to the upside.

Click on chart to enlarge view.

On a relative basis, the Nifty IT Index has failed to make new highs relative to the Nifty 500 since 2014 and remains stuck below that level. A...

Cool your jets.

Some of you are in the BUY THE DIP camp and champing at the bit to make a heroically timed buy here. Others are in the APOCALYPSE camp and are eager to "short-the-world!"

What if both sides are wrong?

We've been advocating for a more defensive approach towards Equities for most of the last month as the Large-Cap Indices failed to hold onto their new highs and have since reiterated that sentiment throughout February. (Feb. 3rd and Feb 18th)

The strongest Equity market in the world has been the US, however, last week prices started to confirm the weakness we were seeing under the surface since January. Today we wrote a brief piece on US market breadth which reinforces our view that defense remains the name of the game.

This follow-up is to make the point that if the strongest market in the world is catching down to weakness in the rest of the world, then India and other countries that have underperformed are likely to continue struggling in the near-term.

In fact, the breadth divergences we highlighted in the US are also playing out in...

From the desk of Tom Bruni @BruniCharting

Bonds, Gold, and Defensive Stocks like Utilities, and Cash have been our defensive playbook for the last month.

We've made it clear over the last few weeks that we don't want to be long stocks given current conditions and think there's downside risk from a short-term perspective, despite the structural picture remaining largely unscathed.

Given last week's slight downside follow-through in US Stocks, I wanted to share two breadth charts from our Market Internals Chartbook that summarizes current conditions well.

From the desk of Tom Bruni @BruniCharting

Cocoa isn't getting a lot of attention right now given all the other things going on in the world, but we think it should be.

In this post, we want to outline a trade that's setting up and how we're going to take advantage of it.

Today we wrote a post discussing the concept of relative strength and how it's kept us on the right side of several trends over the last few years.

Now we're going to apply that analysis to the Nifty Media sector to identify if the struggling group is nearing a turning point.

Let's take a look.

Relative strength is one of our primary tools as Technicians, but we're not talking about the Relative Strength Index.

Instead, we're talking about the relative performance of one security relative to another. By identifying those assets that are outperforming or underperforming, we know which have institutional support and which do not. Institutions are looking for relative strength and momentum

Much like the Relative Strength Index, we utilize this tool as a confirmation tool for price. When relative strength diverges from price, we can identify potential turning points in the trend.

Let's take a look at a few examples.

From the desk of Tom Bruni @BruniCharting

With over 5,000 ETFs trading globally, there have never been more vehicles out there for a market participant to choose from, each with their own spin on a traditional asset.

Today I want to take a look at two WisdomTree ETFs that put what's becoming an ever-more popular spin on the vanilla Emerging Market and China indexes out there.

Although I'll briefly discuss the goal/methodology of these vehicles, our primary goal is to look at them from a Technician's perspective. What does this ETF's construction mean for the underlying holdings and exposure it's providing, and more importantly, its effect on price action? 

From the desk of Steve Strazza @Sstrazza

Thank you to everyone who responded to this week’s mystery chart.

We had a lot of "do nothing" responses this week, many of which were caveated with the fact that the structural trend is lower, thus anticipating an eventual breakdown but waiting for more data to come in to confirm it first.

We also had a number of responses with conviction to buy the test of support and plenty of others who wanted to sell into it or "look to get short." The majority took a neutral approach, preferring to see how prices react at this key level of interest before choosing a directional bias.

I think that is the most prudent thing to do in this situation as well, so with that as our backdrop let’s take a look at this week’s chart.

The team is out with a couple bullish pieces on the metals sector this week. This chart in Gold, in particular has my attention:

This looks like an upside move I want to play.

The near-term issues we're seeing in the broader market make this an interesting environment.

On the one hand, there's reason for caution as breadth and momentum concerns weigh on the leaders and major indices but on the other hand, there are still plenty of opportunities for those with short-term time horizons and those with longer-term ones. Our primary intermediate-term timeframe is where things get messy.

With that said, let's take a look at two stocks we discussed during our Members-Only Conference Call earlier this week as they test key levels with mixed results.

From the desk of Tom Bruni @BruniCharting

We've been fading gold since September for a variety of reasons, but primarily due to the overwhelming amount of selling being done by Commercial Hedgers.

While many of those conditions still exist our risk management for this thesis has always been Gold closing above 1,600.

This week we're getting that, so let's take a look at what's next and how we're taking advantage of it. 

From the desk of Tom Bruni @BruniCharting

This post is a follow-on to this week's "Chart of The Week" which covers the recent breakout in Gold.

Here we'll take a macro look at the Precious Metals space, update our thesis, and outline the best ways to take advantage of it.

Despite our cautious outlook for Equities, there's one stock setting up for a potential short squeeze...and the skewed reward/risk has gotten our attention.

Let's take a look.

We've been outlining our thesis for weakness in Indian Equities for over a month now, but that was a tactical call within the context of bullish longer-term picture.

Unfortunately, with the last week or two of action, we've seen an expansion of stocks participating to the downside which suggests this near-term weakness could continue for the rest of the fourth quarter. Rather than the weakest stocks catching up to the leaders, the leaders are now catching down to the weakest names.

Let's take a look.