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

From the desk of Tom Bruni @BruniCharting

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.

This week's episode is linked below, enjoy!

From the desk of Steve Strazza @Sstrazza

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.

From the desk of Tom Bruni @BruniCharting

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.

It's been a monster run since March for equities, especially in the United States. Rotation, breadth expansion, momentum thrusts, all the works.

So what's going to stop this train? The opposite of those things, most likely.

I think the bear case starts with small-caps. I was taught to dance with the girl who brought me to the dance. Small-caps were one of the key reasons why we got so bearish in early October 2018 and then again this year in early February 2020.

So why ignore them now? I say stick with that.

As we discussed last night on our Monthly Charts Strategy Session (Premium), if you're going to be shorting stocks and betting on the end, I think both Small-caps and Micro-caps need to be below their June highs:

This is the video recording of our September 2, 2020 Monthly Charts Live Strategy Session

If I was a long holder of big positions in $AAPL, $AMZN, $TSLA, $FB, $GOOG — any of the teracaps…. I’d be selling way OTM covered calls like a wild man here.#SKEW

— Sean McLaughlin, NLD 📈 (@chicagosean) September 1, 2020

Covered Calls is not a strategy we employ often at All Star Options, as there are better more efficient ways to use our capital to express similar bets.

Welcome to Episode 2 of the JC & Josh Brown show that he likes to call, "Big Trends Monthly". This is where we discuss a handful of the most important monthly charts that stood out during my review.

I'm always preaching how this is probably the most valuable part of my entire process: Monthly Charts! It's only something I have to do 12 times a year and might take me 30-45 minutes each month. This forces us to take a step back and gives us no choice but to identify the directions of the primary trends.

Josh Brown is one of the most widely followed financial advisors in the country, and he appreciates these monthly candles as much as anyone. So we're now doing a monthly show about it. You can catch up on last month's episode here.

Check out latest show where we discuss what happened in August and what it means to us moving forward:

From the desk of Louis Sykes @haumicharts

Welcome to this week’s edition of Louis’ Look, where I write a brief note for the blog to identify the key lessons I’m learning every week. You can catch up on the previous post here. Today, I want to share what I’ve been thinking about psychology and its relation to technical analysis.

Let’s jump right into it.

This week on the show, Howard and I talk about a really cool new scan that we've been working on here internally. You see, we do a ton of top/down analysis at Allstarcharts. So we've developed a series of bottoms/up filters to help supplement all that top/down work that we already do. This way, it makes it really hard for us to miss anything.

We recorded this video a couple of weeks ago and have already made a lot of progress on this concept of "2 to 100". We're looking for stocks graduating from Small-cap and entering Mid-cap status ($2B+ Market Cap). We'll be putting out more information on this particular universe of stock ideas soon, but for now check out how a friendly conversation can turn into a new valuable tool in a matter of weeks!

From the desk of Steve Strazza @Sstrazza

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 current market environment.

Last week, we highlighted a number of critical Stock Market Indexes and Sectors, as well as assets in the FICC Markets that were approaching logical levels of overhead supply.

This week, we're going to follow up on this theme and see how some of these charts have reacted to the critical levels we pointed out last week.

As September gets under way, it’s time to review positions with September options that remain open (haven’t already hit profit targets or been stopped out).

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

This month, we only have one position with September options remaining on the books. All the rest have already hit their profit targets or stop loss levels. In the scoreboard below I denote the date we exited each position.

Here’s the scoreboard: