This week on the show, Howard and I talk about the value in finding people to synthesize information for you. Howard is one of the best people I know at doing this, and I've picked up a few tricks from him over the years.
We can't be experts in everything. But with new tools and technology, we now have the ability to rely on other subject matter experts to point us in the right direction and give us perspective on how they see the world. I've found this process to be incredibly valuable. I encourage you to try it!
That's why one of the most important concepts we discuss in our work is the need for patience and knowing what we're going to do before it happens. By having a plan in place we can execute our plan once the conditions we've been patiently waiting for come to fruition.
A great example of this has been Crude Oil over the last few months.
For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy,Sell, or Do Nothing?
Well well well... markets go in both directions. Who knew??
I jest of course, but man it was starting to feel like the market will only go up forever. And naturally, when market participants start feeling that way and then they are suddenly hit with a small dose of reality, those of us caught leaning the wrong way tend to panic.
But the panic always recedes as cooler heads prevail and realize that they may have overreacted. This is the bet I'm willing to make right now with today's trade.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the relative strength trends at play and preview some of the things we're watching in order to profit in the weeks and months ahead.
Last week, we followed up on some of the charts we recently cautioned were approaching overhead supply to see how they reacted to these critical levels.
Since we experienced a bit of a selloff on Thursday and Friday, this week we’re going to keep it simple and take a high-level look at some of the most important assets in the world and assess any damage that was endured...
...Spoiler alert: there wasn't much.
Where better to start than with US Equity Markets.
Welcome to this week’s edition of Louis’ Look, where I write a brief note for the blog to document the lessons I’m learning every week. You can read the previous post here. This week, I want to focus on how market leadership is always in flux, and the best way to identify these changes is through, you guessed it, price.
We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.
This is that post, so let's jump into this week's edition.
The Top/Down approach to markets is at the core of what we do at All Star Charts. That means starting at the asset class level and peeling back each layer to refine our view of the smaller components that make up that asset class. With each new layer, we discover information that helps us form our weight of the evidence conclusion.
That brings us to our weekly column, The Top/Down Take, where we hope to educate readers on how we execute this process and highlight its value through the analysis of popular stocks.
Welcome to this week's edition of "Under The Hood."
What we do is analyze the most popular stocks over the trailing week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We are using a variety of new sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.
Whether we're measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers... there is a lot of overlap.
The bottom line is there are a million ways to skin the cat. Relying on our entire arsenal of data makes us confident that we're producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.
Here is this week's list of the most popular stocks. Now, let's see what's going on "...
What's the bear case for equities if Financials start to outperform for the first time in, what feels like, forever?
A funny thing happened this week. The Nasdaq, as well as some of the major Large-Cap US Indexes, were under pressure for a couple of days. But did you realize which which sector was the best performer during that selling?
Financials.
Wait, what? Relative strength in Financials?
Looking at this a little deeper, if Financials were ever going to start to outperform, this would be a perfectly logical place for that to start. In fact, this is exactly where they started to outperform after the Financial crisis:
Click on Charts to Zoom In
The great Louise Yamada often says, "The bigger the collapse, the longer the need for repair". And when it comes to market collapses, the great financial crisis was exactly that. Can you believe that...
The Fixed Income, Commodity, and Currency markets are near and dear to my heart. Ever since I began learning Technical Analysis, I've always loved analyzing things that are "off the beaten path." This included everything from Interest Rates to Soybeans to the Norwegian Krone. Equities are great and all, but this is the stuff that gets me up in the morning.
In addition to the blog posts we do on the site, I've wanted to explore new ways to share that passion with you all and show why even if you're not investing in these markets directly, they're worth paying attention to.
That brings us to my weekly show, "What The FICC?"
In this weekly video series, I'll be highlighting the most important chart or theme from these three asset classes while doing my best to tie that analysis back to Equities through an intermarket signal or a trade idea.
So is this two-day selloff a start of something new? Or is this a gift from the Pullback Gods to get into those longs positions you were FOMO-ing about?
Energy stocks and Crude Oil have been trending in opposite directions over the trailing three months.
We know these kinds of intermarket relationships can dislocate for extended periods of time, but some recent developments in the space have us thinking it may be time for this divergence to correct itself... and it's likely to come in the form of Crude catching down as opposed to stocks catching up.
In this post, we'll reveal this week's Mystery Chart and discuss what the recent action in Oil could mean for Energy stocks in the weeks/months ahead.
Two weeks ago on "What The FICC?" I discussed the potential long-term trend change in Agricultural Commodities and the vehicles to take advantage of it.
It's true that August was a good month for Lean Hogs, Corn, Cocoa, Soybean Oil, and others, but in this post, I want to temper expectations about what we should expect going further.
This week I was a guest on the Confessions of a Market Maker Podcast. This was a really fun discussion about Dow Theory, Perma-Bears, Fibonacci & optimal wine/food pairings. I think it will give you a chance to get to me a little more. Life isn't just about charts and markets!