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All Star Charts

Expert technical analysis of financial markets by JC Parets

Rocks Over Stocks

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From the desk of Steve Strazza @Sstrazza

Thanks to everyone for responding to this week’s Mystery Chart as always.

We had some great responses, most of which were mixed, with a slight majority wanting to “do nothing” and wait to see how price reacts at its former highs.

The chart was the Lithium ETF $LIT, which is breaking out to fresh highs along with a ton of other subsectors within the Materials space right now.

In this post, we will analyze almost every one of the key Materials industry groups to determine whether participation is broadening underneath the surface and supporting the recent strength and rotation into the sector, or vice versa.

[Read more…]

Mystery Chart (09-16-2020)

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From the desk of Steve Strazza @Sstrazza

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

[Read more…]

Chips And Trains

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From the desk of Steve Strazza @Sstrazza

Something we discuss a lot, especially internally, is what we refer to as “New Dow Theory.”

It’s merely the idea that instead of looking at Dow Transports $DJT as the confirming average for Dow Industrials (or the broader market), we should be looking at the Semiconductors index $SOX.

The reasoning behind this is simple, and we won’t get too far into it. The bottom line is that as the US has shifted from a Manufacturing to Services Economy, the methods used to transport modern-day goods and services are very different than they were almost a century ago when Dow Theory was first introduced.

If you feel like going down the rabbit-hole on this like I did, here’s an excellent academic paper on the “Electronic Transport Properties Of Semiconductor Nanostructures.”

As with anything in Technical Analysis, we need to remain flexible and adjust to the new data in front of us. And in recent years at least, one can make a strong argument that the price action from Semiconductors has given us much better information than Transports have.

We don’t know what the right answer is, but we know Transports remain a key cyclical area of the economy, so we simply use both.

In this post, we’ll look at how the two Indexes have performed recently and what signals they’re sending for the broader market.

We’ll then outline trade ideas in a chipmaker and railroad stock that are currently offering a favorable risk/reward.

[Read more…]

The RPP Report: Review. Preview. Profit. (09-14-2020)

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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 weeks and months ahead.

Our last RPP report took a high-level look at the initial damage endured by the recent selloff.

This past week, we saw follow through on that weakness. That means we’ve got to take a deeper look at how the most important assets in the world have held up.

For the first time off the March lows, we’re starting to see a change in character in the way that the market corrects. Particularly Equity Markets, so that will be our focus this week.

Ultimately, while the primary trend remains higher, recent developments have forced a more cautionary short-term outlook. Let’s dive into it!

[Read more…]

Under The Hood (09-11-2020)

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From the desk of Steve Strazza @Sstrazza.

Welcome to our “Under The Hood” column for the week ended September 11, 2020.

What we do is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.

The bottom line is there are a million ways to skin the cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.

[Read more…]

The RPP Report: Review. Preview. Profit. (09-07-2020)

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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 weeks and months ahead.

Last week, we followed up on some of the charts we recently cautioned were approaching overhead supply to see how they reacted to these critical levels.

Since we experienced a bit of a selloff on Thursday and Friday, this week we’re going to keep it simple and take a high-level look at some of the most important assets in the world and assess any damage that was endured…

[Read more…]

Under The Hood (09-04-2020)

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From the desk of Steve Strazza @Sstrazza.

Welcome to this week’s edition of “Under The Hood.”

What we do is analyze the most popular stocks over the trailing week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We are using a variety of new sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.

The bottom line is there are a million ways to skin the cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.

[Read more…]

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