Most of you who know me already know that I incorporate a top/down, weight-of-the-evidence approach. It's not just 1 chart or 1 indicator that says to be long or short the stock market. It doesn't work that way. For me, I put in the work, weigh ALL of the evidence, and then put together a thesis. From there we then look to execute. Since March, however, a more neutral approach towards stocks has been my big theme. As we come into May, I see no evidence that suggests changing that strategy. Cash heavy still makes sense until the data changes and points to allocating that cash once again, long or short.

Today I want to go over a chart that I think the US Stock Market bulls are going to love. To me, it is potentially the most bullish chart in the entire world.

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May's Strategy Session will be held on Tuesday, May 4th 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:

Yesterday I kept a Diary throughout my entire process of reviewing the components of the S&P500. Many of you have written back with such nice things about that. I'm glad you enjoyed it. I think that in order to get the most out the research, it really helps to understand where I'm coming. This helps in the execution process, which is why we're here right? To make money in the market for ourselves and/or for our clients.

Today I felt that a nice supplement to yesterday's S&P500 work is a chart that shows what the S&P500 Equally weighted Index is doing relative to the S&P500 Market-cap weighted index. To me this is a good measure of whether or not we're seeing broad-based participation or if it's just the mega-cap names carrying the weight.

This post is a continuation of Diary of a Charting Session - Part 1

I get asked all the time about my process. A big question is usually around how did I find that chart in such a "random" country or asset, like an ETF on South Korea or a futures chart like Soybeans. To some people these might be assets that are not on their radar, but they are just as easy to trade as Apple shares or Crude Oil, that obviously get much more attention. My answer is simply that I look at all of them and just bring out some of my favorites. This is habit that I got into many years ago, so for me it's second nature.

With that theme in mind I thought it would be a good idea to share my diary of what it's like to go through so many charts. Sometimes I go through International Charts, other times Commodities or Currencies. On Monday I published my deep dive on the Major US Indexes and the bullish developments we're seeing. Today we are taking that one step further and going over every single S&P500 component on both weekly and daily timeframes. I have some personal additions like $TSLA and $DNKN for example, so in total that represents well over 1000 stock charts in this particular...

Next week I'll be flying into Chicago for a couple of days. I've been asked to speak at the University of Chicago School of Financial Mathematics as well as the Chicago Board of Trade (CBOT). The appetite for learning about Technical Analysis that I am finding all over the world is incredible. When I was invited to present at both of these prestigious institutions, Univ of Chicago & CBOT, I jumped at the opportunity. I love Chicago and have friends and some business to take care of there anyway so it works out great. My only catch was that the Cubs had to be in town. They made it happen and I'll be there next week!

We've been able to avoid some short-term messy sort of action lately. We'll take it. The breadth internals of the market had been suggesting since early March that something was wrong. The major indexes breaking uptrend lines further emphasized those characteristics of distribution. Momentum putting in bearish divergences at the highs from Q4 and Q1 this year also pointed to more neutral positioning towards equities. Most of our upside targets had also been achieved by early March and that was difficult to ignore. It's a weight-of-the-evidence approach for me, there's no question.

Today we're going to make the bullish case for US Stocks. Not that I think we rip higher every day from here and we need to buy everything in sight, but I do think it's worth paying attention to the developments from early this week. I also want to pinpoint exactly what we want to see moving forward before getting full on aggressive towards US Stocks as we did in July last year and in late January before that. 

The US Stock Market has been like watching grass grow. It's a hot mess and I'm all for it. We turned Neutral towards US Stocks in March so watching both the bulls and the bears get whipped around is great theater from our cash heavy seats. Nothing I've seen in the past couple of weeks has changed my opinion on this environment. To the contrary, everything continues to suggest having huge cash positions and not trying to be too aggressive - long or short. Cash is king sometimes and neutral is a position too, don't forget that.

Many of us have the ability to invest in other markets. For the few of you who cannot, I still think it's a good learning experience and a valuable academic exercise to explore other markets. You might not be trading (or allowed to trade) foreign markets today, but I promise you that one day in the near future, buying stocks in India will be as seamless as buying Microsoft or Apple. For most of us, it already is. The world is getting smaller, not bigger.

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.

We've been implementing a much more neutral approach towards equities and even most commodities over the past month. This strategy has worked well as many stocks, sectors and countries continue to be a mess. There are times to step on the gas and really push it, like last summer for example. But other times, it's best to sit tight and wait for things to set up in the direction of a trend. A sideways mess is no fun for anyone. That's what we're in right now.

I'll do my best to lay out my weight of the evidence conclusions and walk you step by step with how I got there! It will be held on Tuesday April 18th at 7PM ET. Here are the Registration Details:

These are the registration details for our live monthly conference call for Premium Members of All Star Charts India.

This month’s Conference Call will be held on Wednesday, April 21st 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 every other live call since our launch.

Here are the details for Tuesday:

The bond market has been fascinating lately for sure. Sentiment has been in one direction while price has gone in the complete opposite. Everyone seems to expect rates to rise and therefore bonds to fall. Position data certainly suggests that - the Commercial Hedgers have had a historic net long position. In other words, while the crowd assumes rates are going higher, the smart money is betting on the complete opposite happening. The ultimate arbiter, of course, is price. So today we want to take a look at what the intermarket components of the bond market are suggesting about the future of interest rates.

This morning I had a chance to sit down and chat with the good folks over at Benzinga. I've been doing interviews with Joel and Dennis for years. They've done a nice job of getting some really good guests on here consistently so it's great to be a part of that group.

Today we discuss U.S. Markets, Interest Rates, Silver, US Dollar and the growth in India's stock market. Here is the audio in full:

We're in the market to make money. It should not matter whether that money is made in Energy stocks, Technology, U.S. Equities, European or Chinese. The point is to find opportunities as they come, wherever they come from. I think as we progress into 2017 it is becoming very clear to me that we need to be focused on what is going on in India. Whether we're looking at the currency or the stock market, something interesting is happening here and I think it would be irresponsible of us to ignore.

I'm in New York City this week attending a couple of investing conferences so I went by the Nasdaq to chat with Business News Network about the current market environment. I've been consistently bullish since last year with an upside target in the S&P500 near 2335 and that objective was achieved last month. Now we're starting to see the breadth of momentum deteriorating on the most recent highs. The 2.3% level in the U.S. 10-year yield is the big area we're watching. I think the resolution here in rates will tell us a lot about risk appetite for stocks as we enter the second quarter.

Here is the interview in full (requires flash player):

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: