It's a market of stocks, after all. The indexes are one thing, but the components that drive them are another. Last week we laid out a list of the stocks we wanted to be buying for a December rally. The idea was to get involved with stocks already working, rather than trying to get cute and bottom fish the underperformers.

We'll see how that works out. In the meantime, let's take a look at market breadth.

Whenever in doubt, zoom out. Monthly charts are a great way to do that. On November 30th we got new daily, weekly and monthly candles. This is a lot of new data that we have to work with.

Here is what I'm seeing out there:

The stock market has spoken and it seems clear that we’re stuck in between some pretty significant levels of support and resistance. This argues for more of a sideways mess type of a market vs a complete collapse, at least for now.

We’ve laid out some important prices where something more substantial would be possible. We’ve successfully held above those key prices. A few examples are Technology $XLK above the 2000 highs, Regional Banks $KRE & Broker Dealers $IAI above their respective 2007 highs. In the indexes, 2660 in the S&P500 is a big one. We’re not going to have a complete collapse if these assets are above those levels. It’s if and when we’re below them that the real problems could start.

All of this suggests that we’re in more of a sideways range type market, at least for now. In that environment, if we’re going to buy stocks, we want to buy strength. I don’t think it’s worth messing around looking for mean reversions. We want to buy what has already been working compared to the rest during the past 2 months of selling pressure.

It's the holiday season here in America and stocks are in a downtrend, or sideways trend at best. What does that mean for us as investors?

During our members-only conference call and our trade management post we discussed why a more neutral approach is best as we identify whether equities are going to consolidate at higher levels or begin to roll over again. We also discussed the importance of taking some profits quickly in an environment that produces whipsaws in both directions.

Over the last two weeks we've seen a number of our long ideas failing and more of our short ideas working, suggesting that lower prices are likely ahead in the short-term and that we should continue to err on the short side of stocks. This post will outline some of the evidence we're seeing supporting this thesis, as well as adding a number of short ideas to our trade list from October and November.

I'm on the east coast this week for the Thanksgiving holiday so I came into the city to say hi to friends. Catherine Murray and I had a nice conversation on BNN Bloomberg about US Stocks, Interest Rates and what Credit Spreads are suggesting for overall risk appetite from institutions.

Here is the video in full:

On October 30th we got more constructive on Indian stocks and put out a massive post with stocks to buy. Given that many of these trades were counter-trend in nature, we expanded on our last trade management post during this month's conference call, discussing strategies that are helpful to know in any environment.

We could not be more thrilled to see stocks selling off. There has been more than enough evidence since the beginning of October to suggest that a more neutral approach to markets and/or selling stocks short has been the best course of action. Passive investing is great, in theory, but markets like this remind everyone that hope is not a strategy. We need to weigh the evidence as it comes in and always reevaluate our thesis.

Over the past couple of years you'd have a hard time finding a bigger US Stock Market bull that me. There was no reason not to be incredibly constructive towards equities. Leaders were leading, consolidations were resolving to the upside and the trends globally were up. We didn't think it made any sense whatsoever to fight that trend, while many others did. Top callers were horribly wrong for a long time. 

From the desk of Tom Bruni @BruniCharting

While updating our Canadian Chartbooks this weekend, I noticed a few that stood out as offering well-defined opportunities where the reward/risk is skewed in our favor. This short post will outline these names and levels, but members can view all of our Canadian Universe by clicking here.

There aren't many stocks in Canada hitting all-time highs right now, but Rogers Communications is one of them. It's a leading stock in a strong sector, so as long as it's above 68.70, we want to be long with an upside objective of 95.25.

Click on chart to enlarge view.

From the desk of Tom Bruni @BruniCharting

Over the last few weeks we've looked at signs of rising stress in the credit market, interesting relative strength in bond prices, and a trade on the long side in treasury bonds, but today I want to take a comprehensive look at the bond market and highlight what it's signaling for rates and risk appetite in general.

When we want to see what the market is doing on a given day, we all have our list of the ticker symbols we punch in: $DJIA or $SPY or $QQQ. Some people are more global and look at things like Gold, Crude Oil or Interest Rates and countries like Japanese or German Indexes. I talk to guys and gals who tell me the Russell2000 is the market for them. We're all different. The point is to be true to who you are and act accordingly.

I get asked a lot what that list is for me. The way I interpret this question is, “What are the 15 ticker symbols I punch into my charting software to see what the market did or is doing at any point during the day or night?”.