It's been awfully lonely being a China bull over the past couple of months. All I keep hearing is how China is falling apart and slowing and all sorts of negative sentiment towards the country and its stock market. In the real world, however, where we are forced to live and where only price pays, we've seen emerging markets dominating for 2 months and I think the squeeze higher we've seen in China is just getting started.

First, here is a chart of the Shanghai Composite breaking below last August's lows to start the new year. After a couple of months down there, we are now back above those former lows confirming a failed breakdown. I think this is the catalyst to continue to send Chinese stocks soaring:

U.S. Treasury Bonds have treated us very well this year. Coming into January we wanted to buy a breakout above $122-123 in the U.S. Treasury Bond ETF $TLT with a target above $133. This upside target was achieved last month as interest rates simultaneously hit our downside target, 1.65% in the 10-year yield. Since then, we've wanted to back off and let new data dictate our next move. Over the past month, we've seen rates bounce back up towards 2.0% and the $TLT has fallen back down towards $128.

The question now becomes: Do we get back in on the long side? Or is there more consolidation or price correction needed first?

This is a forgotten space. Since early 2014, the last time Ags had any sort of meaningful rally, we've just seen a deterioration of prices. Whether you're looking at Corn, or Coffee, or Soybeans, the Ags have gotten destroyed. We've see massive rallies this year out of some of the other commodities like in Energy and Metals. Now I think it's time for the Ags to participate in this Commodities Rally.

One of the best ways to be positioned over the past 2 months has been to be in Emerging Markets, not in U.S. Stocks. I've been pounding the table on this trade since January and it has really worked out in our favor. The big question today is: Now What? Does this thing keep going, or does the longer-term trend of the U.S. outperforming Emerging Markets resume in the second quarter?

The noise surrounding the Federal Reserve is some of the silliest and biggest wastes of time in all of the financial industry. The media loves to talk about it, because well, they get paid to talk, not to help you make money in the market. Discussing the Japanese Yen for hours on end isn't sexy. That doesn't drive traffic or boost ratings. But if you're here to try and make money in the market, it's actually the most important thing to be watching here.

Long-time readers and Members of All Star Charts know how much I've been pounding the table about watching the Yen to gain insight on the direction of the U.S. Stock Market. Notice how last month when Yen put in its top (USD/JPY bottom), the S&P500 made its low on the very same day. The Nasdaq Composite also put in its low that day, so did the Russell2000, so did the Mid-cap 400, so did the Russell Micro-cap Index, so did the NYSE Composite. I can keep going, but I think you get the point.

This has been a pretty simple one coming into 2016. Not all charts are as clean as this, so it's hard for me to argue against selling Growth and buying Value. The longer-term trend has been to buy Growth stocks and sell Value stocks since 2006. This strategy has worked well, except maybe during 2012, but even that correction came within the context of a much larger bull market in Growth vs Value stocks.

Today we are looking at a ratio of the Russell 1000 Growth Index Fund vs the Russell 1000 Value Index Fund (IWF / IWD). This is a weekly line chart going back to the low in 2006 showing prices trending higher between 2 converging uptrend lines:

Cotton has been in a horrific bear market for 5 years. When you talk about some of the worst places to be on planet earth over the past half-decade, Cotton has to be near the top of the list. After peaking near 220 in early 2011, the price of Cotton has collapsed recently hitting a low under 55. 

From the desk of Thomas Bruni @BruniCharting

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Although Turkey has already rallied 25% from the January 20th lows, the weight of evidence suggests this may be the start of a much larger move to the upside on an absolute and relative basis.

Structurally Turkey has been in a downtrend since a failed breakout near its all-time highs of 77.50 in early 2013. In August of 2015 prices broke below long-term support at 40 and have since been building a multi-month base below that level. Last week prices were able to break and close above it, while also closing above the downtrend line from the 2015 highs.

We've had quite a rally over the past month in the U.S. Stock Market. This is exactly the type of behavior that we should come to expect after a failed breakdown and bullish momentum divergence, like we saw occur in early February. Let's remember that the U.S. and other developed markets, like Europe for example, are the laggards here. We turned bullish Global Equities in late January, particularly Emerging Markets, and it wasn't until a retest of the January lows, that we started to see the shift in the U.S. and other developed economies early last month.

We only wanted to be long the S&P500 if we were above the August and September lows. The bullish momentum divergence on last month's sell-off helped spark this mean reversion rally.

Dow Theory is something that gets thrown around a lot, usually irresponsibly. What I mean is, that there is a lot more to Dow Theory that what you normally hear about on the TV or read about on the Internets. Usually, conversations about Dow Theory revolve around the Dow Jones Industrial Average and Dow Jones Transportation Average either confirming or not confirming each other's trends. This is indeed part of Dow Theory, but not even in my top 5 most important Dow Theory Tenets. There are other aspects of Dow Theory that we need to pay attention to even more.

Here are my 5 most important Dow Theory Tenets:

Fibonacci Analysis is one of the most valuable and easy to use tools that we have as market participants. I've studied supply and demand behavior for over a decade, and I find myself using Fibonacci tools every single day. These tools can be applied to all timeframes, not just short-term but longer-term. In fact, contrary to popular belief, technical analysis is more useful and much more reliable the longer your time horizon. Fibonacci is no different. 

This doesn't have to be complicated guys. Supply and Demand dynamics do not change. I keep hearing how this market is "algo driven" or whatever, but those algos are built by humans. Supply and demand is based on fear and greed in humans, whether discretionary or systematic. I think the debate about algos is a waste of time for all of us. Let the noisemakers, who aren't trying to make money in the market, worry about that stuff. We're here to focus on supply and demand. Period.

The S&P500 has struggled over the past week to continue this monster rally from last month's lows. It should not be a surprise to anyone that we have struggled. Why? Because prices just ran into a ton of overhead supply. This correction is normal, and should be expected. Blame the algos if you want to sound smart in front of ignorant people at a cocktail party, but where I come from, we call this "normal":

Intermarket Day is one of my favorite days. Yes I'm a huge nerd. Deal with it!

This is when I go through many markets relative to each other. These markets include individual U.S. Sectors compared with the overall U.S. Stock market. We also look at other assets against each other like Bonds, Commodities and Currencies. We price Gold in other currencies, and change around denominators for both trade idea generation and also for informational purposes.

Here are some of the things that stood out from this week's homework:

Today is the 7th anniversary of the S&P500 closing low in March 2009. This date, March 9th, has gone down as the historic low in the stock market after the financial crisis of 2008. But the truth is that the market of stocks bottomed out well before that. Let's remember that the S&P500 is just 1 index with only 500 stocks. The majority of stocks had already bottomed by the time the S&P500 ultimately made its low towards the end of the 1st quarter of 2009.

From the desk of Thomas Bruni @BruniCharting

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During broad rallies in the equity markets, both in the US and globally, I look for those names / sectors / indices that are not participating to the upside, as those are normally the ones that lead to the downside once the market moves lower. One of the names that caught my eye during the rally off the February lows is Pfizer.

Before getting into the analysis of Pfizer, I think it's important to point out the weak relative performance of the sector it belongs to.

The roughly 5 year daily chart of the ratio XLV / SPY shows the under-performance that's been occurring in Healthcare stocks relative to the S&P 500 since mid-2015. Recently this ratio broke down below its primary uptrend line from the 2012 lows while momentum remains in a bearish range, suggesting that this under-performance is likely to continue.

Sometimes I share with you guys what I think is a really interesting chart and/or trade and call it the "Chart of the Week". Other times I'll put together a study to try and confirm or invalidate a prior thesis of mine and I'll title that the "Spreadsheet of the Week". Today, however, I think I have what could very possibly be the Chart Of The Year!

From the desk of Thomas Bruni @BruniCharting

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In early January I was pretty vocal about fading the rally in Natural Gas futures, but with my downside targets met last week, I think this market is setting up for another sharp rally to the upside.

Before getting into my price analysis, it's important to point out that Natural Gas just entered what is seasonally the best 3 month period of the year while public pessimism sits at multi-year highs. The combination of these conditions could provide prices with a serious tailwind if they begin to gain momentum to the upside.

From the desk of Thomas Bruni @BruniCharting

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Last week a structural breakout in AUD/USD was confirmed. Whether you trade currencies or not, it's worth paying attention to because of its implications from an inter-market perspective.

From a structural point of view, the Australian Dollar has been in a downtrend since 2012, with the selling really accelerating in late 2014. Recently this pair met its downside target at support near 0.68-0.69 and began consolidating as momentum diverged positively. Last week, prices broke above the downtrend line from the November 2014 highs to confirm the bullish divergence and breakout. This development suggests that as long as prices remain above the downtrend line, this market is likely headed toward prior support near 0.8075-0.81.

There are a lot of interesting things going on in the Crude Oil market these days from both a long-term and a short-term perspective. Premium Members of Allstarcharts have wanted to be long Crude Oil since mid-February when prices were able to get back above that key $29.60 level. Our short-term upside target was near $38 and this target is being hit this week. Nice little 30% rally. But moving forward, the implications of this short-term move now change the supply and demand dynamics in Crude Oil bigger picture.

Every month we host a conference call for All Star Charts Members where we discuss ongoing themes throughout the global marketplace as well as changes in trends where new positions would be most appropriate. This includes U.S. Stocks & Sectors, International Stock Indexes, Commodities, Currencies and Interest Rate Markets.

This month’s Conference Call will be held on Wednesday March 9, 2016 at 7PM ET

In this month's premium members conference call, we will discuss the following topics:

- How much more upside is left in this global stock market rally?

- Should we expect the U.S. to continue to underperform vs. Emerging Markets?

- How Much Higher Can Crude Oil Go From Here?

- The longer-term dynamics in Gold Miners have changed. How do we profit?

- Apple has bottomed - How high can it go?

- Why We Are Finally Getting That sector rotation into Biotechnology?

As always, we'll leave as much time for Q&A as possible. Looking forward to seeing you on the call!

Here are the Registration Details:

From the desk of Thomas Bruni @BruniCharting

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Crude Oil confirmed a failed breakdown below the 2009 lows last week. This development is extremely important from a risk management standpoint and has big implications from an inter-market perspective.

This market has been in a structural downtrend since late 2014 when prices broke down out of a five year long symmetrical triangle. The resolution out of this pattern was explosive, with prices declining roughly 75% off of the 2014 highs in less than two years. During this decline there has been no reason to be long this market for anything more than a tactical bounce, but with last week's close above the 2009 lows it is finally feasible for those with a longer-term time horizon to approach this market from the long side.