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

From the desk of Tom Bruni @BruniCharting

I know the US Dollar isn't as sexy as Tesla's Elon Musk tweeting market moving information every few hours or Apple hitting a trillion dollar market-cap, but I have been waiting all summer for a resolution of this range in the Dollar Index and it looks like we might be finally getting it. Whether this move is successful and the Dollar continues higher, or it's a failed breakout that sends the Euro ripping, there will be significant cross-asset implications that are worth thinking about as this move develops.

Eight months of sideways consolidation and an upcoming earnings event next week are setting the table for the potential of significant upside in shares of Nvidia $NVDA.

The semiconductor space is a leading indicator for the technology sector which has been outperforming in both an absolute sense as well as relative to the rest of the stock market. We view $NVDA as a leader among semiconductor stocks and it is only natural that this name should resume it's trek higher with the market, which we're still incredibly bullish on.

We're going to make a bet that next week's earnings is the catalyst to get $NVDA moving again.

If you've been reading our blog for a while, you're probably familiar with our process and how we identify reward/risk scenarios that are ridiculously skewed in our favor. With that said, the way we accomplish that doesn't always look exactly the same. Sometimes we're buying breakouts and trading with the trend, other times we're trading against the trend for mean reversion, and other times it's some combination of strategies.

I'm so excited to announce that I've started a new podcast with my friend Phil Pearlman! We're calling it "The Money Game" and we'll have a new episode out each week. For you guys who are unfamiliar with Phil, he earned a doctorate in clinical psychology and has always been the person I turn to when I have questions about human emotions and cognitive behavior. As a technical analyst, what I'm doing is analyzing the behavior of the market and market participants. So understanding who we are and why we act the way we do is part of that process.

Phil and I used to do weekly youtube videos back in 2013 that he would call "Weekends With Allstarcharts". Fast forward 5 years later, and with the power of technology, we're bringing it back as a podcast. 

There are many different ways to gauge the strength of the stock market. One of the most valuable is in the Russell3000, which represents approximately 98% of all investable assets in the U.S. equities market. This week, the value of that index was able to surpass its former high value from January. This comes after the Russell Small-cap Index and Russell-Micro-cap Index had already broken out in May.

The thesis here is that we're just now starting a new leg higher for U.S. stocks. The Russell3000 Index is in a similar situation today as Technology was earlier this year. The risk was very well-defined and the upside was exponentially greater. The market implications were also incredibly important. The Tech stock charts at the time suggested buying them all year and that has, in turn, given us greater confidence in being long the market overall. This Russell3000 situation today is the same in a lot of ways.

On Thursday August 23rd I will be putting on a presentation at the Toronto CFA Society at 4:15PM. This is a free event where I will be discussing the current market environment, walking through strategy and talking about how we find individual investing ideas. We will also save time for Q&A at the end because I really enjoy the back and forth. We'll find a local bar afterwards and continue the conversation.

This event is free for everyone but I'm told that space is limited so lock in your seat right away! Here are the registration details:

Life isn't just about Tesla gossip and Apple at a trillion. There is plenty of "less sexy" market behavior to be paying attention to right now that should have serious implications for the overall market. While boring to some, we have a huge amount of respect for Berkshire Hathaway stock. The breakout we got this week is likely to be the beginning of a 25% move higher which should take this one close to a $700B market cap and we want to be buying!

The Agribusiness sector might not often be thought of as sexy, but it is threatening to break out above 2008 highs (as measured by the Agribusiness ETF $MOO) and individual names are starting to look pretty compelling. As such, we're on the hunt for asymmetric reward-to-risk opportunities and we've identified one using a little creative leverage.

This entire year we've been talking about under-performance in the mid-cap and small-cap segments of the market. To take advantage of that we've wanted to be shorting, or at least avoiding longs in, the weakest names in sectors like Public Sector Banks, Infrastructure, Metals, Media, Realty, etc. Last month many of our downside price targets were hit from a tactical perspective and we took a more neutral approach, waiting for better entries on the short side. Now that we've seen a multi-week bounce off the lows in the mid and small-cap indexes, we're going to revisit the space for the best reward/risk setups on the short side.

From the desk of Tom Bruni @BruniCharting

There's been a lot of talk about equity market breadth both in the US and globally, but one thing I've not seen mentioned throughout the debate is Dow Theory. While there are five tenets of Dow Theory, today I want to focus on the aspect regarding confirmation among the three averages: The Dow Jones Industrial Average, The Dow Jones Transportation Average, and The Dow Jones Utility Average, by assessing their primary trends.

Sponsored by Investor’s Business Daily - Todd Sohn does amazing work on a daily basis. We're constantly communicating and sharing ideas with one another. I can tell you for a fact, there are few people in this world who look through as many charts as Todd. Our process is similar so I have really been looking forward to this conversation. We covered a lot of topics in this episode including U.S. Stocks and the sector rotation we've been seeing underneath the surface. Sentiment is a big part of their work over at Strategas and I find it really interesting how he incorporates analyst ratings to find ideas in the market. This is a good one!

I love this game. It's us against the world to try and make a buck in this market. Every day brings new opportunities and story lines. The hard part is distinguishing between what matters and what is just noise. We're hard wired to need to gossip and tell stories. It's who we are going back to the cognitive revolution 70,000 years ago. In fact, it would be unnatural for us not to participate.

Many of us get our gossip from the market. That's one reason why we all get along and share ideas with one another throughout the trading day. I see some women, for example, watching Bravo and the gossip shows on E and stuff like that. We all get our gossip in different ways. While there seems be little harm done by watching the kardashians or vanderpumps, by following some narratives in the stock market, there is actually a lot of money at risk. So for those of us who get our gossip fix from market story lines, it's especially hard to differentiate reality from fairy tales. 

From the desk of Tom Bruni @BruniCharting

Sector rotation in this market continues and the Agribusiness and Chemical Industries within the Materials Sector look to be heating up. While their performance on a relative basis is lackluster, on an absolute basis there are several setups offering reward/risk scenarios skewed in our favor.

First let's take a structural look at the Agribusiness ETF $MOO, which contains exposure to Chemical stocks as there is no ETF dedicated to that industry. Prices got back to their '08 highs earlier in the year and have been consolidating since. A breakout above 66 would signal the beginning of a new long-term uptrend that targets 94.25.

Click on chart to enlarge view.

From a tactical perspective prices are back toward the top of an ascending triangle continuation pattern. If prices can break above 64.70 we'll likely see a move up toward the 161.8% extension of the '15-'16 decline near 68.75.

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From the desk of Tom Bruni @BruniCharting

Earlier this year I discussed what I look for when picking a bottom in a stock using Twitter as an example. Today I want to look at The Container Store because it's exhibiting similar characteristics that suggest the stock has begun a new long-term uptrend.

We're witnessing yet another breakout attempt in the commodities market, and this time it's Cotton. This post is going to take a look at the setup, how it may develop, and how we can take advantage of it.

From the desk of Tom Bruni @BruniCharting

Every so often we hear the narrative that under-performance from China's stock market is a canary in the coal mine for US Equities, and the recent tariff tantrums have brought this discussion front and center. Today I want to look at this relationship to see if it has any merit or if it's just a smart sounding soundbite that you can use around the office water cooler.

I won't pretend to know anything about medical devices, how they're built, or why they work. But that doesn't mean we can't profit in the sector.

The Medical Devices sector as a whole is trading at all time highs, and one particular name is setting up a screaming buy opportunity.

From the desk of Tom Bruni @BruniCharting

We've been extremely vocal about the Medical Devices space on the blog, and rightfully so, with the sector continuing its long-term trend of out-performance throughout 2018. The index has 57 components, but because the top 10 stocks make up roughly 60% of the index, opportunities in the smaller components tend to be overlooked by many market participants. In this post I want to look at all of its components and highlight names where our risk is well-defined and the reward/risk is still skewed in our favor.

Let's start off with the sector ETF $IHI on an absolute basis for context. Prices are just off all-time highs after successfully retesting their breakout area near 203.50. As long as prices are above that level, short and intermediate-term momentum remains intact and our next upside objective is up near 248-249.50.

Click on chart to enlarge view.

On a relative basis, the sector continues to digest its strong year-to-date gains and work off a bearish momentum divergence by...

Most Nifty Indexes' largest components have a very large weighting on their performance, and Nifty Pharma is no exception. Sun Pharmaceuticals represents roughly a quarter of the index, so today we're going to look at it's role as a potential leading indicator for the rest of the sector.

Below is a daily line chart of the Nifty Pharma Index overlayed with Sun Pharmaceuticals. What we see from this relationship is that Sun Pharma generally leads the index, so when it's showing relative strength a move higher is likely, and when it's showing relative weakness then a move lower is likely. The two rarely separate from each other for long.

Why this is relevant to us now is because in May when the index undercut its August 2017 lows, Sun Pharmaceuticals actually held those lows and has been showing relative strength ever since. With history as our guide, this suggests that we may want to be looking for a move to the upside in both Sun Pharmaceuticals and the sector as a whole.

For some additional context, here is a daily chart of Sun...

From the desk of Tom Bruni @BruniCharting

Interest rates are on the move, with the Ten-Year Treasury Yield breaking 3% once again after working off its failed breakout attempt from May. One relationship that's highly correlated with the Ten-Year Yield is Regional Banks vs REITS. We've written about this relationship in 2016 and 2017, but it's at an important inflection point so today's chart is going to revisit it.

This conversation with Mark Dow kicks off Season 2 of the All Star Charts Interviews sponsored by Investor's Business Daily. Mark worked for the U.S. Treasury Department in charge of Emerging Markets in the early 90s and later was a sovereign analyst at a Mutual Fund before ultimately running money for a Global Macro Hedge Fund in New York City. Today, Mark runs a Family Office from southern California and recently launched a Private Twitter Account that you can subscribe to called Behavioral Macro. In this Episode, we talk about the benefits of Technical Analysis throughout both process and execution, where we are in the...

I'm really excited to share with you guys that I will be coming to Texas in early September for a series of events put on by the CMT Association. I will be speaking at the Dallas Chapter on September 4th, Austin September 5th and Houston on September 6th.

Each of these events will be free to both Members and Non-members of the CMT Association, so everyone is welcome. Here are the dates and details: