Last week the Nasdaq100 went out at new all-time weekly closing highs. While that might seem like a bullish characteristic on the surface, I think it's important to recognize what is happening within the actual index itself. Like I always try and reiterate, this is not a "stock market", it is a market of stocks. Today we're going to take a look at what is actually going on here.

This is JC's Playbook to Profit In Q2:

One of the most important tools we have as technicians is the ability to measure momentum. Remember, buy side fund managers are obsessed with looking for stocks and assets showing momentum. They hate sitting in things that aren't doing anything. Whether you're a buy side fund manager or not, it's important to think this way. Opportunity cost (where else you can invest that money) is important too. Looking for stocks with bullish momentum characteristics is something we want to do when markets are in an uptrend. When momentum starts to fade, it's a heads up that price is likely to follow.

Today I want to focus particular attention on the breadth of momentum. We want to approach this as a market of stocks, not a stock market. There are many components that drive these indexes, sometime more than others depending on the index. We can focus on particular areas like energy or financials, or different market caps large or small. I also want to know how momentum in the entire market is doing: Are we seeing positive momentum characteristics or negative ones?

I'm sure by now you've had the time to digest the never ending headlines about an 8-year anniversary of a bull market for the S&P500. The problem with all of them is that the S&P500 has NOT been in a bull market for 8 years. In fact, there is a very strong argument to make that it could have just hit its one-year anniversary. Also, let's remember the motivations of the people who are suggesting that the S&P500 is entering the 9th year of a single bull market. In a majority of cases they are purposely misleading you for personal gain.

It's important to identify that the one single reason these people are using is actually a small technicality that they are irresponsibly pointing out and choosing to isolate as the sole basis for this conclusion. The single reason they are using to suggest that the S&P500 is entering its 9th year of a bull market is because in 2011 the S&P500 fell only 19.38% from peak to trough on a closing basis and not 20%. Again, let me stress that this is the ONLY data point they are using to claim we are in an 8-year bull market. And to make matters worse, their reasoning is because it fell 19.38...

Emerging markets have been a real laggard. While developed markets around the world have been making new highs, it’s just now that emerging markets are catching up. This week the MSCI Emerging Markets Index Fund $EEM broke out to the highest level since the summer of 2015. This comes after 7 months of sideways consolidation:

It's hard to ignore certain market moves that tend to be very rare. Bullish outside days that engulf the prior period are one of those. I think this is exactly what we saw this week in the AMEX Arline Index and it is something we want to respect. This is especially the case if you consider where this bullish reversal took place, just below important support.

Every month I host a conference call for All Star Charts Premium 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 week I laid out a list of bullish characteristics for stocks and my list of bearish characteristics in the current market environment. The reason for this exercise is to weigh the evidence and see which way the scale tilts. In this month's call, we'll dive deeper into the leading sectors and really identify the signs we'll be watching for to signal further deterioration in stocks, not just in the U.S. but globally.

We have a lot to discuss! It will be held on Tuesday March 21st at 7PM ET. Here are the Registration Details:

Remember, it's not about being right, it's about making money. Is it nice to be right? Of course. But it's even nicer to be profitable. In order to do so, we focus more attention on figuring out where we're wrong rather than allocating time and resources to fascinating about potential profits. If you want to be on my team, we're going to play defense. So when we set specific parameters to be long against, we stay disciplined and move on to other opportunities when need be. If you use stop losses, it's about executing them and then looking elsewhere. If your options expire worthless, just know you limited your loss to the premium you paid. The priority is always on the risk management, not on dreaming about future profits. I encourage everyone to read this post from last year: Knowing Where To Get Out Before Getting In

In today's market environment I think it's even more important to reiterate this point. Last week I mentioned that if we started to see cracks in certain levels for specific assets, then a more cautious stance is appropriate for stocks. Well, over the last few days, we've started to see that...

Intermarket Analysis is a fantastic tool that is available to us as technicians regardless of our time horizon. Certain gauges of risk appetite, or risk aversion, can be seen simultaneously throughout various asset classes. We use these correlations as confirmations or divergences from data we're getting elsewhere. Today I want to focus on the direction of the U.S. Interest Rate Market and compare it to the data we're getting from Regional Bank Stocks and Real Estate Investment Trusts. The relationship between Banks and REITs is similar to the tug of war going on between investors in the Bond Market. 

Technical Analysis is the study of the behavior of the market and market participants. We try and identify the direction of the primary trend and invest accordingly. As Technicians we can apply our price-focused approach to any market, whether it's stocks, commodities, currencies or even Bitcoin. If it is liquid and driven by the supply and demand dynamics in that particular market, then applying our methods of price analysis makes perfect sense and it works very well.

I jumped on board the Bitcoin train last year and added it to my Research Platform. Our clients really enjoy it, whether they are actively trading it or just interested in the product. To be honest, one of the biggest reasons why I decided to start including it in my weekly analysis is because I saw an opportunity to profit from this market. At the end of the day, isn't that why all of us are looking at these charts in the first place, Bitcoin or otherwise?  

For me it's not just about buying a group of stocks, but about buying the strongest members of that group. I am a firm believer that by erring on the long side of relative strength or erring on the short side of relative weakness, the odds of a continuation in trend is much greater than the odds of a reversal. Therefore, there is a higher probability of success by following trend, rather than trying to fight trends. So today I want to talk about how we're going to take this top/down approach and apply it to find profitable trades this month in Energy stocks. 

Hey guys, I could really use your help with this. I'm trying to a consensus answer on the list of the 10 most important liquid assets on earth. I've given this a lot of thought and have come up with mine. But I want to know what you think. I'll post the poll results at the end of the week. Here is my list in no particular order:

I'm lucky that I get a chance to read a lot and converse with really smart market participants all the time. So there are many lessons that I've gotten to learn the easy way, from my predecessors and colleagues. But there are some lessons that damn it you just need to learn on your own. For me one of those lessons was trading stocks near flat 200 day moving averages. And when I say "stock", this can refer to an ETF, Commodity Futures, Index, etc. But when they're near their directionless longer-term smoothing mechanism, you're begging for trouble. If you like headaches, trade stocks near flat 200 day moving averages. 

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

March's Strategy Session will be held on Tuesday, March 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:

I'm lucky in that I learned early in my career that we're in a global market place. The United States, while it is certainly important, is just one country within a massive interconnected global market. We see this more and more every day. Many choose to focus on US Stocks, and that's fine. But I think even if that's the case, approaching the market globally is not only an advantage, but becoming more of a necessity with each day that passes.

Today I want to share a chart that really tells an interesting story about what is actually happening in stocks around the world. I've taken the 10 largest exchanges in the world, including both developed and emerging markets, and equally-weighted each of them to create an All Star Charts Top 10 Global Exchanges Index. You can see embedded in the chart, the exact list of components:

Every month I host a conference call for All Star Charts Premium 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.

Over the past 10 days I have been traveling throughout southeast Asia learning new strategies and perspectives from local traders and investors. I'm lucky that I truly love what I do and the evolution of my process is far from complete. Every day the world is getting smaller and more interconnected than ever. Although cultures my be very different, the human psyche is universal. Our emotions controlled by fear and greed can be seen everywhere from New York City, to St. Louis, MO to London, to Kuala Lumpur. The difference is simply the perspective from which each investor sees the world, and therefore the marketplace. Trying to get inside the mind of these investors has been a fascinating process and I firmly believe that it gives me a leg up over everyone else.

This month...

Today I wanted to talk about something that I've never really written about here before but I think is a really important point that I want to make sure I get across. I'm lucky that I get to chat with investors all over the world on a daily basis. Whether you are a professional investor with 30 years of experience, or a student in Hong Kong who just made his/her first trade, I am always willing to chat. Not only does this help me learn about different strategies, objectives and cultures, but also helps give me perspective from all sorts of different angles.

A common theme that I get a lot is regarding chart patterns and pattern recognition: "JC how did you know that consolidation would resolve higher?". Other times I get, "JC how did you know that was a failed breakout and how come this example $XYZ is one you don't consider to be a failed breakout?" The explanations you guys give me make plenty of sense, "But momentum is diverging with prices making new highs!" And in most cases you're probably right. But to me, it's bigger than that. The analysis is not just about one pattern or one divergence or even just one chart. It's about taking these...

These are the recorded video presentations from Chart Summit, the first ever Virtual Technical Analysis Conference. Premium Members of Allstarcharts get private access to these videos to view at your own pace. I hope you get as much value out of these as I did.

The first ever Chart Summit was a huge success. I can't believe how awesome that was. Considering this was 100% virtual and presenters and audience members were logging in remotely from every part of the world, we managed to get through it without many hiccups. Most of the videos have been published correctly and audience members are able to go back and get through about 95% of all the content. Not bad. I think we'll take it.

The feedback has been amazing so thank you to everyone who helped make this possible, including our presenters, our sponsors and, most importantly, to our audience who showed up with enthusiasm to learn! I love to see so much excitement towards the discipline of Technical Analysis. I did everything I could with the hope that my predecessors who first broke barriers for us Technicians back in the 1960s and 70s would be proud of what we were able to accomplish last week.

Here is the video of my presentation where I go over my top/down approach to markets, including examples of what we're seeing in today's environment. In order to bring some additional value, I also discuss my approach...