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Investors Are Underweight Cash, First Time Since 2013

December 18, 2020 by JC

I was going through the Global Fund Manager Survey this week and thought this one stood out the most.

Remember, this survey is loaded with all kinds of stuff. So there’s something for everyone to cherry pick to fit their narrative.

But this one would catch my eye, regardless of my thoughts on the trend of the market.

We’re looking at the percentage of investors who say they’re overweight on cash at any given time, all the way back to 2001. But what it’s really showing is that a net percentage of investors are actually underweight cash. [Read more…]

Louis’ Look: Takeaways From CMT Level 1

December 18, 2020 by Louis Sykes

From the desk of Louis Sykes @haumicharts

Monday was the big day, I had my first CMT exam.

It’s one thing stacking up all the topics you need to learn for the test, but it’s another to take on lasting knowledge that’ll carry you for the years ahead.

Shooting through the textbooks and lectures reinforced that despite all the charts I go through, the process I use represents only a very small proportion of the way people interpret technical data. Seriously, there were dozens of indicators, ways to plot price, and even basic assumptions on why we do technical analysis that I had never come across.

This was all so great to learn.

While I might not use these tools on a day-to-day basis, understanding how people look at markets differently and expanding my knowledge and skills can only be a strength.

[Read more…]

[Premium] 2 to 100 Club (12-16-2020)

December 16, 2020 by Steve Strazza

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying 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, and Salesforce, to a myriad of others… all 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 will notice we are 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 that are closest to new 52-week highs. This allows the cream of these strongest groups to rise to the top and makes our job easier to identify technical breakouts in the top-performing stocks.

[Read more…]

[Options] Sapping Energy

December 16, 2020 by Sean McLaughlin

The Energy sector has had some interesting moves in both directions in 2020.

Sell off with everything else in March. Hard bounce with everything else in the Spring. Then a slowly accelerating slide into mid October where it caught another bounce.

But what’s notable to me is that the down move which ended in October did not undercut the March lows, and the current recovery seems to be running out of steam below the June highs. Feels to me that Energy, and it’s $XLE sector ETF is consolidating. [Read more…]

[Premium] Details For December 2020 Conference Call

December 16, 2020 by JC

These are the registration details for our live monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Monday December 21st at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday: [Read more…]

The Next Targets For Bitcoin

December 16, 2020 by JC

Remember 3 years ago when Bitcoin was the talk of the town and everyone wanted in? Well, by then anyone who wanted to buy it had already done so. Bitcoin went on to lose over 80% of its value over the next 12 months. That’s how bubbles end. An instant classic.

Now, as we’ve learned, newer markets in their infancy stages tend to have faster and more frequent cycles. When you go back and study the US Stock Market in the 1800s, for example, there was a “Panic” every other year. It was the wild west back then.

Welcome to the 21st Century’s version of the wild west. Cycles happen faster. Bubbles collapsing take less time to reset and begin a new leg higher. I think this is something we should continue to expect in the Crytpo space.

Here we are just 3 years after the bubble peaked, working on a fresh breakout and new leg higher. To put things in perspective, Financials are still down from their peak in 2007, over 13 years later. Technology took 18 years to finally surpass its 2000 bubble peak. And Japan is working on over 30 years so far and still 45% away from its 1989 bubble highs.

So if you’re not sure whether cycles in newer markets happen faster and more frequently, just go study the ones from the past. These are quicker. Which is important to know, I think.

So where can Bitcoin go? After a 3 year base, it can go a lot higher. Go back and check out some of the previous moves in this asset after it completed prior bases over the past decade.

But what’s next?

I think it’s right near 30,000. That would represent the 161.8% extension of the 2017 highs as well as the 261.8% extension of the 2019 highs: [Read more…]

Decision Time For Mega-caps

December 15, 2020 by JC

The Mega-cap names have been digesting their 2020 gains since early September. Go one by one and most of them are down over the past 3+ months. All except the last one at the bottom.

The Tesla bulls will love this one: [Read more…]

RPP Report: Review. Preview. Profit. (12-11-2020)

December 15, 2020 by Louis Sykes

From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts

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 absolute and relative trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.

In last week’s report, we discussed the continued rotation into SMIDS, international markets, and risk assets. Our conclusion is and continues to be that the market remains in a very healthy state of order.

FICC markets are also confirming the move higher in equities.

From a short-term perspective, SMIDS digesting their recent gains would be a healthy development. [Read more…]