Today we're taking a look at an index that often gets ignored. The Value Line Geometric Index is currently flirting with a multi-decade breakout. This is an equally weighted index using a geometric average, so the daily change is closest to the median stock price change. It's a much broader measure of the market vs something like the Dow Jones Industrial Average. 

We're checking through an online car reseller to find a new ride for another journey to our favorite destination -- The Hundred-Dolla-Roll!

It's my favorite exercise each month. There is nothing else I do throughout my entire process that provides as much value as my Monthly Chart Review. Here's what stood out to me this month:

Let's start with Papa Dow. The Dow Jones Industrial Average has gone nowhere for 20 months. Flat for over a year and a half:

Click on Charts To Zoom In

Whenever in doubt zoom out. Here is a much longer-term view to really help put things in perspective. All things considered, this 20 month consolidation is perfectly symmetrical with the prior 20 years. What happens if we clear 27000 and hold it? It looks like a lot of upside to me. All of this is consistent with this correction since January 2018 being a cyclical bear market within a longer-term structural bull market. In other words, a shorter-term correction within a longer-term uptrend. That seems perfectly fair:

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It's that time of the cycle where we begin to evaluate our open positions that are soon expiring. We had a number of September expiration trades that have already closed -- either because their profit target was achieved ($XLB $XLE) or their stop loss level was violated ($AVGO $CSX $HFC $XLY), but we still have four open positions that require our attention as the calendar transitions to September.

We'll talk more about these in our upcoming monthly All Star Options conference call, but I'll give you a head start on our current thinking here:

This post is a continuation of this week's Mystery Chart Reveal in which we discuss many of the big bases forming in the Energy sector.

Tuesday's Mystery Chart received similar responses, with most people looking to short the stock on a break below support.

Now, let's look at the chart and its related theme.

From the desk of Tom Bruni @BruniCharting

Tuesday's Mystery Chart is one of my favorite charts right now, so thank you all for your feedback and participation.

Everyone was on the same page here, waiting for a resolution before getting involved. Sometimes nothing is the best answer, that's why it's one of the choices.

With that as our backdrop, let's get into it.

From the desk of Tom Bruni @BruniCharting

Retail ETF XRT is at an interesting level, so in this post we're gonna take a look at its chart and what the internals are suggesting for the sector in the weeks/months ahead.

This could be a major top in the US Stock Market. It could be a historic top like 2007 or 1929, maybe even 1987. This is certainly a possible outcome.

Something else to consider is that betting on these outcomes is rarely a profitable endeavor. They make movies about the heroes who bet heavily on the financial collapse of 2008 and made fortunes. We talk about these fund managers like legends. What they don't make movies about are the infinite number of investors over the years who have bet on such outcomes, and were wrong instead. I guess Hollywood doesn't think those stories will sell.

I understand the bearish thesis for US Stocks. In fact, we always take the other side of our opinions and try to poke wholes in a given theme. We've been in the camp that since most stocks have gone down to sideways over the past 19 months, this is a classic cyclical bear market. It has gone on through both price and time, not just one of the two. I don't care how you slice it, this was a bear market, and possibly still is.

Now, whenever in doubt, zoom out right? I think we can agree that the rallies of 2016 and 2017 deserved a rest. So the question is whether this "rest...

Continuing a theme that we started the week with, we're still on the hunt for attractive long opportunities in the strongest sectors. When markets get choppy and uncertainty about market regime change looms, I seek relative safety in the corners of the market that have continued to hold up well. And since the beginning of August, one of those sectors has been the Medical Devices sector.

And here's one of the names showing signs of a developing breakout.