From the desk of Thomas Bruni @BruniCharting

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With Cotton futures nearly 75% off their 2011 highs, market participants may be looking for a reason to get long this market. The weight of evidence however, suggests there is likely another 15% downside ahead.

The daily chart spanning back nine years shows prices topping and subsequently beginning a downtrend in early 2011. Over the past eighteen months prices have consolidated as they attempted to break back above the 2012 lows and downtrend line from the 2011 highs. Despite its efforts, Cotton could not close back above the confluence of resistance at 68 and is now threatening to break through the lower end of the 57-68 range.

From a structural perspective the next logical area

[hide_from accesslevel="premium"]In this week's members-only letter we discuss the following topics:

• Why Emerging Markets Are Outperforming U.S. Stocks
• Did you Listen and Take Profits In Treasury Bonds Last Week?
• How To Make Money In Apple, Twitter, Yahoo and GoPro
• Which Developed Markets Should We Buy: Europe or Japan?
• Is It Time To Own China? Why?
• Which Stocks Will Lead the U.S. Stock Market Higher?

This weekend I did my regular global macro review. This is when I go country by country analyzing the weekly and daily charts of all of the stock markets around the world. Each chart includes a momentum study (14-period RSI) and a 200 period moving average that we use to help with trend recognition. I trade indexes all over the world, simply because I can. Why wouldn't I?

Precious metals are a sensitive subject in some circles. Discussions about gold or silver tend to bring out more anger and craziness than other assets. As someone who couldn't care less about what we're trading, Gold, Apple, Bonds, Australian Dollars or Go Pro, to me it's just letters and math. I find it kind of funny when people get extra sensitive about a specific asset. Precious metals bring out some of the most hilarious commentary.

Today, I want to break down Gold and Precious Metals from many different angles in order to put it into context from both a structural perspective and a shorter-term tactical outlook.

From the desk of Thomas Bruni @BruniCharting

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With the Yen rallying nearly 10% from intraday low to high in as many days, this breakout is not one to be ignored. Since the Yen has  a strong negative correlation with US equities, this inter-market relationship is an important one to keep track of regardless of whether you trade currencies or not.

Structurally the Yen has been trading in a seven point range at and below the 2006-2007 lows for the last 15 months. Late last year prices confirmed a failed breakdown by breaking back above the 2005 & 2007 lows, as well as the downtrend line from the 2012 highs.

Over the past two weeks prices have accelerated to the upside, providing additional confirmation that this market is headed higher. As long as prices can hold above support outlined in gray (.0082), then the weight of evidence suggests the first upside target is near the 161.8% extension of the late 2014-2016 range and prior support near .0098-.0099.

From the desk of Thomas Bruni @BruniCharting

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A few weeks ago global equity markets began to mean revert to the upside after many met downside targets and momentum positively diverged. For examples of this check out my posts from then here and here. The same failed breakdowns and bullish momentum divergences that sparked a rally globally are now present across many of the US sectors and indices.

Of the 41 US indices / sectors I follow, 28 of them have bullish momentum divergences on the daily charts and have either confirmed, or are working on confirming, a failed breakdown by trading back above a prior low.

From the desk of Thomas Bruni @BruniCharting

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Twitter has been a disaster of a stock for the majority of its time as a public company, but recent price action suggests a tradable bottom may be in on an absolute and relative basis.

Before getting into the price action, it's worth acknowledging the continued deterioration in sentiment regarding this stock in recent months. I've been negative on the stock for a while, but with the downside targets I outlined here being met, I don't see a reason to be overly pessimistic on the stock at current levels. With price action improving in the face of another poor earnings report and another slew of analyst downgrades, it appears, at least anecdotally, that sentiment is overly bearish in this name.

With sentiment suggesting a neutral/bullish stance is appropriate, let's see what price is indicating.

From the desk of Thomas Bruni @BruniCharting

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Regardless of how strong their brand may be, Disney continues to remain correlated to the S&P 500, as most stocks do during a bear market, and remains in a downtrend. Despite the neutral to bearish structural picture, the stock looks to be setting up for a tactical bounce in the coming weeks.

Structurally the stock remains range bound between 90 and the all-time highs at 122. During this recent selloff, prices retested the uptrend line from the 2009 lows, which also corresponded with the 38.2% retracement of the 2011-2015 rally. I don't believe in triple bottoms, and although this is the third time testing the $90 level, current evidence suggests the stock can stage a counter-trend rally before continuing to the downside.

Over the next month I will be giving several technical analysis presentations on the east coast and all of you are invited to join me. Some of you have seen me give these before, so just know that they are all different. I try and tailor the educational content to the current market environment that is obviously always evolving. Here are the upcoming dates and details:

Price.

In every market there are leaders and there are laggards. This is the case in both bull and bear markets. Regardless of the environment, some stocks and sectors will simply outperform others. Sometimes, this relative performance tells us a lot about the overall risk-appetite for institutional investors and in which direction they are headed.

Today's Chart Of The Week

In honor of Superbowl 50, we created a countdown of what we consider to be the most important 50 charts in the world. These include U.S. Stocks and Sectors, International Indexes, Currencies, Commodities, Interest Rate Markets and Global Intermarket relationships. Some of these are more actionable than others, but collectively I think they truly tell the story of global market risk, or risk aversion for that matter.

Members of All Star Charts get access to all of this information 24/7, so we would like to invite you to start a 30-Day Risk Free Trial and Join us to see if our community is right for you. We have received incredible feedback from our members and will continue to improve the platform.

Discount Offer & Risk Free Trial: https://allstarcharts.com/superbowl/

Here is the video in full (audio begins immediately, video gets going after 30 seconds).....Enjoy!

Every month we host a conference call for All Star Charts 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 month's Conference Call will be held Thursday February 11, 2016 at 7PM ET

In this month's premium members conference call, we will discuss the following topics:

- Can we still get a counter-trend rally before getting down to 1720 in the S&P500?

- A deep dive look at the Bond Market and how to profit from it

- Why Emerging Markets will keep outperforming

- Crude Oil and Gold - What do we do with these now?

- Amazon has been a great short, but what do we do with these momentum stocks today?

As always, we'll leave as much time for Q&A as possible.

Here are the Registration Details:

One of the most valuable tools that we have as market participants is in taking the sum of the parts to help come up with a final conclusion. While we all talk about what the Dow did yesterday or what it’s done year-to-date, it is easy to forget that there are 30 companies driving this popular U.S. stock market benchmark. By going through each of these 30 stocks, we can get a better feel for the market itself rather than just analyzing the performance of the index. To me, it’s the combination of the two that seems to be the best approach.

All of the 30 Dow Components have just been updated in the Chartbook, and here are my notes on the results:

From the desk of Thomas Bruni @brunicharting

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As momentum stocks breakdown, the Nasdaq 100 has begun to breakdown in a similar fashion on a relative basis.

Below is a daily chart of the Nasdaq 100 vs the S&P 500.

This ratio broke out to new highs late last year and spent a few months consolidating before ultimately resolving to the downside. This violent resolution lower confirmed a failed breakout as well as a bearish momentum divergence. Prices have since broken through the uptrend line from the summer of 2014 and look to be heading for a test of the uptrend from the June 2013 lows. From failed moves come fast moves, so I wouldn't be surprised if this ratio ultimately retests the breakout level near 2.0 which corresponds with the 61.8% retracement of the 2013-2016 rally.

Within this theme, Electronic Arts is one individual component that looks particularly vulnerable to the meltdown...

In honor of Superbowl 50 I share with you what I think are the best 50 charts in the world. The hashtag on Twitter to follow along is #SB50Charts. Here is the entire list in order. Click the link inside the tweets for comments on each chart.

One of the strongest and most impressive trends over the past 8 years has been the fierce and dramatic outperformance of the United States Stock Market over everyone else. Even when global equities have gotten hit hard, the U.S. has been referred to as the "Best house in a bad block". This is for good reason too. It has been. We've seen tremendous outperformance during both good and bad markets.

Momentum is a word that gets thrown around a lot. I personally like to measure momentum using a 14-period relative strength index (see here), but different people have different definitions. Fine. For today, we'll argue that "momentum" stocks are those listed in the MSCI USA Momentum Index. Looking at these stocks as a group, I think they are going to continue to get destroyed going forward, particularly relative to the rest of the market.

First of all, forget this whole FANG thing. I don't know who made that up or why people like to limit it to just 4 stocks. I think it's stupid. They have nothing to do with one another and there should be others included in the list. In fact, in November I wrote a piece about how FANG stocks are this cycles Four Horseman (See here) and was further evidence at the time that made us very bearish U.S. Stocks heading into December and January. That obviously worked out very well.

The U.S. Stock market and most of its sectors continue to rally. As happy as we are to see this, and as much as we expect this to continue through February, these are only counter-trend rallies within larger structural declines. The good news is that counter-trend rallies in bear markets historically tend to be the most powerful kind of rallies. I think there is still room to the upside in many different sectors with very well-defined risk.

All of the charts have been updated on the Chartbook. Here are my notes for this week's sector review:

As you guys know I started to turn bullish towards the stock market over the last couple of weeks for the first time since last October. Now, I want to make sure that we all understand that this is just a counter-trend rally within an ongoing bear market. Regardless, this is still a rally that I would like to participate in on the long side and every day

I am finding more and more opportunities to buy beaten down names, just for a trade, of course.