What if I told you that we can potentially make 50% on a trade with minimal risk. What if I also told you that it's showing tremendous relative strength and positive momentum? Do I have your attention? You'd certainly have mine!

I can't think of a better time to talk about Fibonacci Extensions. The Dow Jones Industrial Average right now is fighting to break through an important cluster of extensions that stem from the last two epic peaks we had in the market: 2000 and 2007. A breakout above 27,000 could spark a new cyclical bull market that we believe falls within the context of an ongoing structural bull market. In other words, this is a more intermediate-term breakout (years) while structurally (decades) we have already been in a bull market since arguably 2013 or even 2016.

In this video I talk about 2 key extensions: 261.8% and 423.6% which is exactly where the Dow stopped going up in early 2018. Was 17 months enough time at these levels before we can move on? Let's discuss:

This is one of my favorite things to do: Forget everything that happened in the first half of the year and start from scratch. It doesn't matter what we did or how we felt in early 2019. It's irrelevant. We're moving forward. This is my Q3 2019 Playbook.

From the desk of Tom Bruni @BruniCharting

Every time we see a few days of strength from Financials or Energy, people come out of the woodwork to call a bottom in the Value Factor.

After the last few weeks of action, we find ourselves back in this position.

So is this time different? Let's take a look.

Today we're exploring opportunities in two beaten-down sectors that look ripe for a squeeze.

From the desk of Tom Bruni @BruniCharting

We've been bearish the Micro/Small/Mid-Caps relative to Large and Mega-Caps from a structural perspective for most of the last year, however, last week's rally confirmed the conditions we look to indicate potential outperformance in the coming weeks and months.

Monthly charts force us to take a step back and identify the direction of the primary trend. By erring in the direction of these trends, we are increasing our probabilities of success. Markets trend. That's why Technical Analysis works. This process at the end of each month is arguably the most valuable part of all the work I do. I can tell you that from the bottom of my heart.

One that definitely stands out here is the Dow Jones Industrial Average going out at new all-time monthly closing highs. This is the highest monthly close in the history of the stock market:

Another interesting one is Gold going out at new 6-year highs:

The Nifty Metal Index has been dead money for a while, but we are finally starting to see signs of stabilization within the space.

While there aren't a lot of actionable trades right now, we think that rotation into this area is a positive for the broader market and will offer some great setups on the long side in the second half of this year.

From the desk of Tom Bruni @BruniCharting

We just sent out the Top 10 Charts of The Week Report that goes out to our Institutional Clients every Wednesday morning, and while I may be biased, I really enjoyed putting together week's edition.

We discussed a few market themes as we typically do and then identified several actionable trade ideas on both the weekly and daily timeframes.

With that said, I wanted to share one chart and its caption because I think they sum up the current market environment pretty well.

From the desk of Tom Bruni @BruniCharting

The good news is the S&P 500 and several other large-cap US indexes are back at all-time highs, however, the bad news is there remains a lack of confirmation from breadth and momentum readings around the world.

Needless to say, it was easier to be buying stocks last month than it is today, but let's avoid getting into the weeds and simply look at the number of markets around the world above their 2018 highs.

Below is a table of the global equity markets we track prices in their local currencies. While there are performance stats from several key inflection points like the January 2018 and September highs in the S&P 500, as well as its bottom on December 24th, we want to focus on the left-most "Change From 2018 Highs" column.

This compares the market prices now to where they were at their highest point in 2018, or in other words, it gives us an idea of what the trend is.

Currently, the median stock market in the world is 6.22% off its 2018 high.

Click on table to enlarge view.

Here is the video from my BNN Bloomberg interview this week. We talk about the implications of a weaker US Dollar, including what that would do to stocks, emerging markets, metals and others. I've been waiting for it all year. But think about it. We've already seen some of the things we would expect to see in a weaker Dollar environment. Gold strong, for example, and an inability for the Euro to go lower. So for me, I think this Dollar fall is just getting started.