I don't like how many oversold conditions have been hit in the major indexes and most sectors. I've tried my best to point out the stocks showing both relative strength and momentum. But there are an awful lot of charts I see where oversold conditions in momentum is a problem. So the question becomes, is a retest of the lows necessary for stocks to continue higher?

Studying the behavior of market participants is something that we do on a daily basis, whether we recognize it or not. Especially as Technical Analysts who focus on changes in price at very specific levels, understanding the psychology behind why investors are behaving in certain ways is part of that process. Dr. Daniel Crosby is an excellent resource for investors looking to learn more about themselves and investor psychology. In this conversation we discuss the cognitive behavior...

The market is never going to give us what we want. We have to take what the market gives us. Play the hand we're given, not the hand we wish we had. What worked in one market environment is not going to work in another. That's why all those filters fail so frequently, because you're trying to take something from the market instead of taking what it is giving us.

This week, a spike in volatility caused forced selling in stock index vehicles that trickled down to ETFs and individual stocks. We did not see any stress, however, in credit markets, currencies or any of the commodities like Crude Oil or Gold. This is further evidence that we want to continue be buyers of weakness, like we have been throughout all of last year and most of 2016. There will be periods where we want to be sellers of strength, but I don't believe that is the correct approach today.

I thought this would be a good time to share some of my thoughts on position sizing. I've noticed this week many people who never mentioned a futures contract are now opining on the futures market at all hours of the night. I know what that feels like. I've been there. 2008 was an amazing experience for me. It's not the lifestyle that I want to live. Sleeping at night is healthy. If my positions are too big, I'm not sleeping.

To me, the key to avoiding bad decisions is to keep stress and emotional levels low. It's hard to do that when there is too much money involved for you to handle responsibly. So we want to identify how much is too much. It's not an easy answer and most likely something you'll learn over time. When you get that feeling like you've just been punched in the stomach, you're probably too big. You'll know it when you feel it. Most of us have been there, multiple times. 

If you've been following along, I try and go out of my way to discuss risk management techniques, tools and signals when the market gives them to us. Whenever I lay out a thesis, I like to talk about what the market should look like in the case that we are correct, while at the same time outlining what the environment would look like if we are wrong. The idea is to picture both scenarios and as the data comes in, try to identify which outcome we're in as quickly as possible.

Based on what we saw in some of the volatility related products this week, it's clear someone got squeezed, or a bunch of someones. There was big money leaning in the other direction clearly. We've seen this sort of market behavior regularly - last April/May, then again in August. This was more extreme and most likely not the last time it happens. This is becoming normal. These leveraged products are a real risk when they all get squeezed simultaneously, there are forced liquidations. We saw elevated levels of volatility throughout the 90s and stocks kept rallying for years. So we can have volatility and rising...

It's not a secret that Emerging Markets were the big loser for a long time. Since peaking during the 2010-2011 time period, the underformance of anything EM, Mining and Natural Resources has been clear to all of us. Gold was a terrible investment, mining stocks, stocks in mining countries and others in that area had been the worst place to put your money for many years. Although still not in a full fledged parabolic rise, we've seen what appears like a healthy completion of a massive base.

To me, this is suggesting that the outperformance we've been seeing out of Emerging Markets is just getting started. The initial burst from early 2016 was more of a beta trade. This is when stocks as an asset class bottomed and the worst of the worst, emerging markets in this case, outperformed because of their higher volatility nature and the simple fact that, the harder the pounce, the more violent the bounce. We've gone nowhere the past 15 months since that initial thrust of the lows. Until now.

The bond market is the biggest market in the world. Hello?

It's easy to get caught up in the daily noise about some crypto currency or a biotech stock. But these are tiny tiny tiny itsy bitsy little markets. The bond market is a real market, with actual money in it and driven by the largest financial institutions and governments all over the world. If you want real information, the bond market is where to get it.

My friend Larry McDonald, a former Lehman Brothers Bond Trader, was on a recent podcast episode of Technical Analysis Radio talking about exactly this. I encourage you to give it a listen, it's not long.

Today we're taking a look at credit spreads. Why? Because we're always watching them. In November when some people were freaking out about the sell-off in bonds,...

Say what you want about rubber and tyres, but they seem to be a great business. I have a stock today that I wanted to share with you that I think does well moving forward, but also outperforms the rest of the auto industry.

Chart Summit 2018 is in the books. What another great day of thought out presentations filled with both educational and timely actionable material. We try to make it a point here not to live life in theory, but in reality. I go to too many conferences where all the discussions are purely academic and theoretical. Listen, I understand that this sort of material is 'evergreen' and can be watched for a long time afterwards. Sure, and I like some of that too, don't get me wrong. But we're here in the market to make money. So we want to see you put your tools to work in the current market environment. What are we buying and what are we selling? Let's make sure to talk about what's most important!

This year I invited a group of presenters that I thought each brought a different perspective on the markets. Last year I tried to do something similar, but the 2018 Chart Summit was unique in many ways. Once again, we were broadcasting live from the internet on a Saturday so our audience was all over the world in the comfort of their own houses, flats and dorm rooms. The diversity of attendees was one for the record books, in terms of age, sex, location and occupation.

I...

It's amazing how many people in this world completely ignore monthly charts. I never understood it. It's an exercise that only needs to be done once a month. It's not like eating healthy or working out that you have to do it consistently for it to work. This is 30 minutes per month! 30 minutes! 12 times a year. That's 6 hours of work that will be the most important and productive 6 hours of the entire year. Even if you have a short-term time horizon, all of these shorter-term trends come within the context of a much larger structural picture.

We're now in February so, of course, we want to talk about what happened in January. I'll have my friend Jeff Hirsch from Stock Traders Almanac on the podcast this week talking about the seasonal data that is so critical this time of year. But as far as price itself is concerned, we want to rip through all of the monthly charts like we do at the end of every month. I find it really helpful to not just look through the major U.S. and Global Indexes, but also individual sectors, stocks, commodities, currencies and intermarket relationships. We don't have to look through...

On January 27th, 2018 the 2nd Annual Chart Summit was broadcasting LIVE from the Internet, bringing together an elite group of professional technicians who walked the audience through their process and showed us how to apply their methods in the current market environment. This impressive list of industry experts...

This weekend was our second annual Chart Summit. I still can't believe all the amazing feedback that continues to come in after this event. Thank you all from the bottom of my heart, both the presenters and the audience members. I didn't think we could make something even better than the original, but I think based on the responses, we may have actually pulled it off. Wow!

Our video production folks are hard at work putting all the videos together, but I've picked out the ones I did so I can share with all of you as soon as possible. The rest will be out this week.

On Monday, I shared the video of the first presentation I gave which was about my process. You can watch that here. In this next video, we take all of those tools and techniques I explained in Video 1 and apply them to the current market environment. Here you will see me walk through the top/down approach using...

It's hard to ignore a sector that is breaking out to new highs, especially when it's something that it hasn't done in a long time. Biotechnology has been a laggard for years. If we've wanted to be in healthcare, it certainly has not been in Biotech or Pharma, it's been Medical Equipment stocks. But it's 2018 and times are changing.

Today we're looking at breakouts in both the Equally-weighted Biotechnology Fund $XBI and the Cap-weighted Biotechnology Fund $IBB. Because of the very different composition of the two sector funds, we want to make sure to always watch the behavior of both. The $XBI tells a better story of the sector because it is not dominated by the big names like Amgen or Gilead. But at the same time, we're not going to just throw out the fact that $AMZN is a huge component of the Discretionary space, for example. So I think it's important to always keep an eye on both the cap-weighted and equally-weighted sector indexes.

One of the most recent developments that stands out among the sector rotation that we're seeing is the strength in IT Stocks. We're seeing a breakout on the NIFTY IT Sector Index and we're seeing that IT Sector Index breaking out relative to the NIFTY500. So in other words, we're seeing massive breakouts on both an absolute and relative basis. Those are characteristics of uptrends, not downtrends.

Today we're focusing specifically on the NIFTY IT Index and how it's doing compared to the rest of the market. You can see here how the NIFTY IT Index is breaking out to new all-time highs and now holding above the former highs from 2015. If we're above that former resistance we want to be very aggressively long IT Stocks:

We are getting the breakouts we've been looking for in the IT Sector. We're not just seeing it in the sector itself, the breakout is coming on a relative basis as well. The IT Sector has been a terrible underperformer the last several years. In fact, it peaked relative to the rest of the market in 2014, over a year before it peaked on an absolute basis. It's 2018 and things are different.

Today we're taking a look at the IT Stocks in India and which ones we need to be buying. 

Biotechnology has not been something you've been hearing me pound the table about for a long time. I was a huge Biotech bull in 2015, but this has not been something we've wanted to be involved with much since. The biggest reason is for the dramatic under-performance. The winning areas have been in Technology, Industrials and Financials, not Biotechnology. If we've wanted to be in healthcare at all it's been in the Medical Device and Equipment stocks, not Pharma or Biotech.

It's 2018 now and things are changing; sectors are rotating. We're seeing strength in Energy, Materials and really just Natural Resources in general. Canada and Australia breaking out finally points to strength in that area as well.

Today we're going to talk specifically about Biotechnology and if/where we want to be involved. 

This weekend I hosted the 2nd annual Chart Summit, a virtual technical analysis conference that is free for everyone and anyone to attend. It all started a year ago when I got a bunch of really smart friends together on a Saturday to share their process with the world and their thoughts on the current market environment. It was such a success that we may have accidentally created the greatest Technical Analysis Conference of all time, and it was FREE. You can still watch the videos of those presentations on the original Chart Summit 2017 page.

Our presenters this year didn't skip a beat. They took it right from where we left off last year and killed it in Chart Summit 2018. I know I personally learned a lot, and based on the emails and comments that seems like a pretty universal feeling among the audience. We had fun and we got different perspectives about market behavior from a variety of approaches. That's what it was about. I was blown away by some of the presentations. It was awesome!

I didn't know how much time I would have for some of my own...

Register here for our live monthly conference call for Premium Members of All Star Charts India.

January's Strategy Session will be held on Tuesday, February 2nd at 7 PM IST. As always, if you cannot make the call live, the video and slides will be archived and published here along with all of our past conference calls.

Here are the details for Tuesday:

If you look through all of the commodities on the Multi Commodity Exchange of India I think you'll find more opportunities today than at any point in the past year. I'm finding the best risk vs reward propositions in the metals and energy space specifically, not just in India but all over the world.

Today we're taking a look at Gold specifically because I think it offers one of the best risk vs reward propositions on the entire exchange:

Life is not just about stocks! There are plenty of opportunities in the commodities market and I think today is no different. In fact, we're seeing more ways of making money on the commodities exchange in this current market environment than we have throughout the past year.

Today we're diving into the MCX to isolate only the best risk vs reward opportunities. These will all be added to the Chartbook in the coming days/weeks. Here are my notes and trade ideas for now:

One of the things that often gets underrated is the power of simplicity. What's wrong with only looking at price and focusing in only on what matters most? I get that you love your moving averages and candlesticks and all sorts of momentum indicators. But the most important indicator is still price. So that's what we're going to look at today using OHLC Bar Charts.

I get asked all the time, "JC why should I care what's happening in Finland or Canada if I'm just trying to make money in stocks here in India?"

This is certainly a valid question and one that I think we need to address here before moving any further. Let's remember that this is a "market of stocks" and not just a "stock market". In other words, while things like the NIFTY50 and the S&P500 are indexes and a good gauge for the health of the overall market, there are many individual components that make up these averages. Oftentimes, that gets lost in the shuffle.

To add to this thought, let's also remember that "Stocks" as an asset class are represented by companies all over the world in many different countries. These countries' stock market averages tend to move in sync. In other words, the S&P500 is not going up or down because of what is happening in America. It is going up despite what is happening in America and in a solid uptrend along with the rest of the world. I can make the exact same case for the NIFTY50 and stocks in India. They have not been rallying simply because of what is taking place within the borders of...

When you rip through 5000 charts a week you start to notice a few things. One thing that has caught my attention recently is the fact that there stocks just now breaking out of 20 year bases. These aren't some irrelevant micro-cap companies either, these are stocks that are literally representing some of the most important industries in America. It's hard to ignore these developments and I think it points to further strength in the U.S. Stock Market this year.

Stocks aren't breaking down from major tops. We saw so much of that happening throughout 2007 that it became almost impossible not to be short equities in 2008. Today we are still seeing the exact opposite: breakouts from major bases, multi-decade bases in some cases. Today I'm going to point out 3 very important stocks that are just now coming out of historic consolidations.

Chart Summit 2018 is finally here. We could not be more excited for this event after the unbelievable experience we had last year! In January of 2017, I called up a bunch of my smartest friends and put on the first ever 100% virtual conference on Technical Analysis, and it was FREE! We had over 10,000 attendees from over 100 different countries. The feedback I received immediately after the event was like nothing I had ever seen before. I couldn't believe it.

If you missed last year's event, you can still watch the videos of those presentations here and I highly encourage you to do so. We had traders like Peter Brandt, Brian Shannon and Joe Fahmy explaining their approach and best ideas. Top Wall Street Analysts like Ari Wald, Jonathan Krinsky and legend Gail Dudack showed the world how they look at markets and what sorts of things they were showing their buy side customers at the time.

This was an amazing event from an educational perspective, but also provided the audience with very actionable market commentary. This year, we are...