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Expert technical analysis of financial markets by JC Parets

This Is What Overwhelming Supply Looks Like

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I don’t want to keep talking about the same asset, you guys know we pride ourselves in looking for opportunities all over the world and across asset classes. But this Bitcoin scenario right now presents us with the perfect opportunity to explain what overwhelming amount of supply looks like. So bear with me, no pun intended (ok maybe a little).

Our upside objectives in Gold and Bitcoin were both hit recently. They were the former highs from 2011 and 2017, respectively. We discussed this in our Greater Fool discussion.

But WHY were those our targets? WHY were we, and still are, so focused on those former highs?

The reason is because it is a FACT, that last time Bitcoin was up here just under 20,000 there was more selling pressure than buying pressure. There was more supply than demand. This isn’t like “JC’s Opinion”, or the opinion of my team. These are just facts. Bull or bear, bitcoin cult leader or not, you can’t disagree there. Last time prices were up here, they fell. And they fell hard.

We call that overwhelming amount of supply relative to demand. Here’s that epic crash that was sparked last time prices were here 3 years ago: [Read more…]

Mystery Chart (12-08-2020)

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From the desk of Steve Strazza @Sstrazza

New Mystery Chart!

For those new to this 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…]

Are US Interest Rates Going Higher?

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I think this is an important discussion. Which way are rates headed?

Remember, Interest Rates setting up for a collapse was one of the reasons we were so bearish equities in late January, and looking to own bonds instead.

The thought process in January was the following: If 10s are going to break their 2012 & 2016 lows, is that most likely happening in an environment where stocks are doing well? Or are rates collapsing most likely taking place in an environment where stocks are under pressure?

Our bet was the latter. We used rates as a leading indicator.

Today we’re doing the same thing. But the data coming in is the exact opposite.

First of all, here are US rates going out last week at new 9-month highs: [Read more…]

Media Appearance: Sector, Market-cap & International Rotation

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Monday afternoon I popped on to BNN Bloomberg to have my regular chat with Catherine Murray. These are always fun because we focus on what actually happening in the market, versus all the gossip that revolves around it.

Remember, we’re coming off my Just Buy Them Baby interview with Catherine from July. We got a lot of funny emails from people after that one. But as it turns out, just buying them worked out very well.

So where do we go from here?

Here’s the interview in full:  [Read more…]

RPP Report: Review. Preview. Profit. (12-04-2020)

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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 relative strength 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 outlined how the market was in an incredibly healthy state of order. We’ve been seeing rotation into SMIDS and Micro-Caps, strong breadth, and a sustained bid for Growth, particularly down the market-cap scale.

This week, we’re harping on a similar theme.

The weight of the evidence, particularly from an intermediate and long-term time horizon, looks excellent.

But from a more short-term and tactical perspective, it would be healthy for many indexes down the market-cap scale to digest their gains. Many sector indexes and ratios are at key inflection points, so we’ll be taking in the fresh data as we go to see just how strong the hands of buyers truly are.

[Read more…]

Under The Hood (12-04-2020)

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From the desk of Steve Strazza @Sstrazza.

Welcome to our “Under The Hood” column for the week ending December 04, 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 this 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…]

Are You A Permabear? 12 Questions To Ask Yourself.

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When I was younger I would fight trends a lot. I was that guy regularly betting on mean reversions.

Then over time I realized just how stupid that was.

I was actually a permabear in early 2013. I admit it. It was a great lesson that will help me for the rest of my investing life.

We all have to learn somehow.

But that’s the point. We need to learn eventually. [Read more…]

Filed Under: ASC

It’s Not About A Virus, It’s About Credit

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Are you wondering whether it’s justifiable for stocks to be doing what they’re doing?

We continue to make new all-time highs, which makes perfect sense. More stocks are participating to the upside. More sectors and industry groups are catching a bid. And more countries around the world are breaking out.

And the bond market agrees!

This has never been about a virus or a vaccine. It’s been about credit spreads, which are hitting their lowest levels since February.

If stocks were going to fall apart and these permabears were going to be right, for once, then we’d see it in credit.

We’re not.

In fact, it’s actually the exact opposite: [Read more…]

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