Expert technical analysis of financial markets by JC Parets
Today we sit down with my old pal Larry McDonald.
When it comes to the bond market, Larry is the guy I want to talk to. And with Bonds getting off to their worst start to a year, maybe ever, what better time than the present to dive into the fixed income markets?
While I had him, we also discussed the equities markets, commodities, metals and Crypto.
This was a fun one.
I hope you enjoy it as much as I did.
I caught the last 30 minutes-ish of the live Elon Musk interview on TED Talks Thursday morning and I found it riveting. Sadly, I missed most of the discussion regarding his recent splashes with Twitter.
Picking up when I did, there were other things I should’ve been doing (writing this note, for example), but I was immediately hooked. I couldn’t peel myself away from it.
It felt like a real earnest look into the mind of a savant.
Say what you will about Elon Musk the Man, Elon Musk the Innovator, Elon Musk the Political Animal, or Elon Musk the Podcaster and Tweeter. I’m not here to pass any judgments on who he is, what he stands for, or how he accomplishes his aims.
What stood out for me during the chat was the laser focus he has on things he puts his mind to.
When he mentioned that he understands deeply how EVERY piece of his cars are made and assembled, and when he uttered that there is nobody on Planet Earth currently living who knows more about manufacturing then him, I believed him. He wasn’t trying to impress us with this information. He was saying it matter-of-factly.
Yet, as impressive as all his accomplishments (and failures) to this point have been, he has so many higher goals to achieve for himself, and by extension for mankind.
But at the same time, I was feeling a little sad for him. He had the appearance of an individual who is tortured by an ever-inquisitive mind that has no on/off switch. It’s just ON all the time, cranked to eleven.
It hit home for me.
As a Trader who is always trying to find new ways to pull money from the markets, [Read more…]
I read a book recently that got into the fact that any and all edges in trading, no matter how robust, degrade over time.
The author listed a variety of reasons, but the biggest one that caught my attention is that if the edge is so good, then the simple act of making a bunch of money exploiting this edge will eventually get discovered.
This is an incestuous business where people talk. Brokers talk to their clients. Clients talk to their industry contacts. Word gets around about so and so making all kinds of money. And then copycat traders act and move in to also take advantage of said edge. And this crowding in will work to eventually minimize or trivialize the edge.
Then it’s back to square one. [Read more…]
This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.
From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Commodities are off to another record year — and it’s only April!
Crude oil and friends are leading the charge as the energy-heavy CRB Index is up 34% year to date.
Oil ripped above 100 in February and has been in a corrective phase since. The energy complex remains red-hot though, with natural gas futures breaking to fresh 13-year highs this week.
While crude oil finds its footing, its derivatives — heating oil and gasoline, are coiling just beneath all-time highs and gearing up for some massive base breakouts.
We’re also seeing some bullish data points for the broader oil and gas industry as crack spreads are expanding and signaling a healthy demand for black gold. This bodes particularly well for oil refiners.
All of this price behavior is what we like to call rotation.
It’s an essential characteristic of any real bull market, and it’s exactly what we’re seeing from commodities these days.
In fact, we’re even seeing constructive rotation within commodity subgroups, like the developments we just described in energy markets.
Let’s dive in and talk about some areas in energy that we think are ready to catch some of this rotation next.
From the desk of Steve Strazza @Sstrazza
Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats.
In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for five to nine years.
We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money.”
Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
By adding our technical analysis to the mix, the Young Aristocrat setups give you the opportunity to own the best of the market’s future blue-chip winners before they become must-own household names.
Oftentimes, the strongest performers in this universe and even the Aristocrats themselves pay relatively small dividends.
This is usually because the stock appreciation makes it tough to keep up with the payout — even for companies that consistently grow their yield in the double-digits!
For this reason, we don’t have a minimum threshold for the dividend. What we’re really doing here is creating a list of quality stocks based on their ability to persistently grow their shareholder return.
And maybe the best part? This list is not just designed for long-term investors. Any kind of investor or trader can use this list as it helps generate ideas across all timeframes, even the short term.
Remember, some of the most important filters we use for this list are momentum, relative strength, and proximity to new highs.
So, let’s keep it real: These stocks are going up across all time horizons.
From the desk of Steve Strazza @Sstrazza
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.
We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
