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All Star Charts

Expert technical analysis of financial markets by JC Parets

Bear Markets are a Choice

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There are stocks going up and there are stocks going down.

I’m old enough to remember when we would all call that normal.

The going up category just got longer recently. Remember Energy had been the only Sector Index above its 200 day moving average.

Healthcare is now also on that list.

Industrials and Consumer Staples are the next closest ones.

This morning we talked about how poorly the Tech heavy Emerging Markets were doing vs those like Brazil, Saudi Arabia and Indonesia, that have a much different composition.

The difference in performance is off the charts.

There are big winners and big losers.

Another big loser driving headlines is in Large-cap Growth. Stocks like Google and Facebook got crushed after earnings. And now Amazon is joining that list after the bell Thursday.

But that’s specifically Large-cap Growth.

Small-cap Growth, on the other hand, is holding up way better.

You can see here how Small-cap Growth is hitting the highest levels of the year relative to Large-cap Growth: [Read more…]

The Riskiest Bonds Look Best

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From the Desk of Ian Culley @Ianculley

Bonds have stopped falling across the board!

That doesn’t mean it’s time to go all in. Tactically, it’s difficult to get behind this week’s near-term strength. 

Right now, we’re looking at just a few days of bullish price action. And where do we define our risk?

We have to know where we’re right and where we’re wrong before we get involved in any investment. 

Thankfully, high-yield bonds answer this all-important question.

[Read more…]

Chart of the Day: Winners Win

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You certainly see it in life – the losers usually continue to lose. And winners win.

It’s the same thing in the stock market. Winners tend to keep on winning, and the losers remain losers for a reason.

With the whole ESG scam unraveling over the past couple of years, the market has voted with their dollars.

That’s what pays.

Not cute bed time stories. Actual Dollars.

Forget the narratives. I want to know what investors are ACTUALLY doing.

And as we have documented here consistently, the voting dollars are being used to buy Energy.

But I continue to be impressed with the strength in Energy stocks, despite the correction we’ve seen in Crude Oil Futures.

Look at that relative strength: [Read more…]

Mean Reversion or New Trend?

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Bear markets are infamous for their counter-trend rallies.

Breakouts fail, and the charts are painted with false moves.

Throughout this bear market, traders have bought the breakouts to then dump the next day into an illiquid tape.

Given the gains we’ve seen over the last few days, I think it’s important we step back.

[Read more…]

You’re Crazy To Be Short

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I understand the theories about Crypto Currencies being a scam.

“The whole thing is about to fall apart”, they tell me.

And yea maybe.

That’s entirely possible.

I don’t really care that much either way. If it goes up, I hope to profit from it. And if all the coins go to zero, I’ll make sure I’m not in them.

Other people losing money long crypto in that scenario is not my problem. I don’t have the slightest interest or the time to care about other people’s portfolios.

And I say that only to reiterate that I’m approaching this conversation with a very open mind.

Because we all know that the Bitcoin maxis and Ethereum folks can rarely have a civilized conversation, particularly with those who might disagree.

So to be clear, I do not care at all.

I’m much more interested in what’s for dinner tomorrow than I am worried about whether Bitcoin is going to a million or zero.

Now with all of that out of the way, I think you have to be out of your mind to be short BTC or ETH if they are above their prior cycle’s peak.

Here’s what that looks like: [Read more…]

2 to 100 Club (10-26-2022)

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Welcome to the 2 to 100 Club.

As many of you know, something we’ve been working on internally is using various bottom-up tools and scans to complement our top-down approach. It’s really been working for us!

One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn’t just end there.

We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.

When you look at the stocks in our table, you’ll notice we’re only focused on Technology and Growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.

Then, like any good technician, we filter the list down to those closest to new highs.

This allows the cream of these strong groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.

[Read more…]

[Options] Playing a Risky Reversal

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We continue to be handcuffed by earnings season. Some of the best setups we like right now are in stocks slated to announce earnings over the next week or two. As an options trader, I don’t like to position ahead of imminent earnings announcements. That is tough binary risk to control.

Today’s trade has earnings coming up in a little over a month from now, so that’ll have to do. At least it gives us some time to build a little cushion. Because if we’re wrong in this trade, it’s likely we’ll find out pretty quickly over the next two weeks. [Read more…]

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