From the desk of Tom Bruni @BruniCharting

The Research and/or Trading business can be a very lonely endeavor for many, so I wanted to use this post to outline the role that collaboration plays in my process and why I feel it's so important.

Some people actually think this world is just filled with rainbows and butterflies and stocks are always supposed to go up. I never understood that ignorance. Sometimes stocks go up, sometimes they go down and sometimes they go sideways for a while. It will take you less than 5 minutes of market history research to understand this very simple fact.

Of those 3, I would argue we are in the 'sideways for a while' category in U.S. Stocks, particularly the S&P500.

Our Video team has been hard at work publishing the videos of all the presentations from this year's Chart Summit. They sent over this highlight reel that I think shows exactly what went down in Breckenridge last month. If you were not able to attend this year, don't worry, we're already thinking about locations for Chart Summit 2020!

One options strategy that we occasionally employ at All Star Options is a bullish Risk Reversal. This is a trade we like to put on when the cost of naked calls is too high for our comfort (due to high volatility and/or higher priced strikes), and we're comfortable taking ownership of long stock in a "worst case" scenario.

Simply, it is a trade where we typically purchase an out-of-the-money call, and finance this purchase (all or in part) with the sale of an equal amount of naked puts in the the same expiration cycle.

This is an advanced-level trade that requires more buying power than most trades we put on (due to the naked puts component) and a higher level of comfort with risk. A typical risk reward graph would look like this:

It's been a frustrating period for stocks in Canada over the past decade. Up just 7% since their 2008 highs, Canadian equities have been consistently underperforming for almost 10 years. But are things now finally changing?

This week we're back with another Mystery Chart.

For those new to the exercise, we take a chart of interest and eliminate the x and y-axes and and all labels eliminated to minimize bias. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.

The point here is to not guess what it is, but instead to think about what you would do right now. Buy, Sell, or Do Nothing?

Going through charts and coming up with conclusions is not just something you do once. For this to work, Technical Analysis has to be a lifestyle. Getting away from the screen regularly and coming back open minded is part of that work / life balance. In this conversation I talk about some of the struggles I've had personally trying not to let the implications of us being right in our assessment impact my decision making. Thanks to Donnie Hensley and Speedtrader for being a part of Chart Summit 2019.

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and eliminate the x and y-axes and and all labels eliminated to minimize bias. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.

The point here is to not guess what it is, but instead to think about what you would do right now. Buy, Sell, or Do Nothing?

Last week we wrote about signs of a long-term bottom in stocks emerging and the market has continued higher since then. Today we want to look the individual sectors to identify where we want to be selling strength, buying weakness, and avoiding altogether.

We've also written a post about the individual stocks with the best reward/risk proposition right now, so be sure to check that out as well.

In our other post we looked at all the sectors to identify our stance toward each and equities as an asset class, so this post will focus on the best individual stock trade setups in the market right now. If you haven't read that, please read that first so you have some context around this post.

These are the registration details for the monthly conference call held for Premium Members of All Star Charts. In this call we will discuss the global market environment and how to profit from it. As always, this will include Stocks, Interest Rates, Commodities and Currencies. The video of the call will be archived in the members section to re-watch any time and the PDF of the charts will be made available as well.

This month’s Conference Call will be held on Tuesday March 19th at 7PM ET. Here are the details for the call:

If there is one thing that has worked since October, it's cash. I feel like people are afraid of that word. Like you're doing something wrong for raising some (or a lot of) cash. Do you think it makes sense to always be fully invested? I don't.

I look at everything through the lens of potential opportunity cost. What else could we be doing with that money? In liquid markets, sometimes it's treasury bonds, other times it's gold, and of course all of the market neutral pair trades and options strategies to profit from sideways markets.

Cash is an investment too. Why do you always have to be all in? You want to think 50 years out? Go ahead. We're only concerned about the next couple of quarters. We'll worry about next year, next year. And 50 years from now? I only hope to be around sipping wine and ripping through charts. We'll see...

So about today.

From the desk of Tom Bruni @BruniCharting

My presentation at Chart Summit 2019 focused on market breadth and how we like to keep our process of looking at the subject pretty simple.

While that presentation covered a number of our methods of measuring the market's internals, in this post I want to share some stats we pulled this weekend that help provide some valuable context around the market's rally from the December 24th lows.

The table below outlines the major US Indexes we cover with performance stats from important inflection points: The January 2018 highs, the September 2018 peak, and the December 24th low.

We also have some additional stats listed like percentage below 52-week high and above 52-week low, days since those events occurred, whether the daily RSI reading is in a bullish or bearish range, and whether prices are above their 200-day moving average.

The columns we want to pay attention to for now are the first three.

Click on table to enlarge view.

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Imitation is the best form of flattery. And we liked our trade idea in $WYNN so much that a nearly identical play setting up in a completely different sector warrants us the opportunity to repeat the same mechanics.

One of the cool things about Chart Summit this year was that we were all surrounded by smart experienced market participants with unique styles and approaches to the market. When you have a collection of talent like this, I think it's wise to pull them off to the side and pick their brains. In this conversation, I ask Todd Gordon about Fibonacci Analysis and why he uses it so frequently. Some people like to dismiss it, and that's fine. If I didn't think it helped, trust me, I wouldn't use it. But it's been helping me every day for well over a decade. I really enjoyed this chat with Todd and I'm thrilled that he was able to be a part of the first ever live Chart Summit in Breckenridge, CO.