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All Star Charts

Expert technical analysis of financial markets by JC Parets

Why The Dow’s Revamp Could Propel It To New Highs

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From the desk of Steve Strazza @Sstrazza

The Dow is one of the most important major averages in the world. We monitor it religiously as it has historically been an excellent gauge for the broader market.

This week three old-school Dow stocks- Exxon $XOM, Raytheon $RTX, and Pfizer $PFE, were replaced with some fresh blood from the likes of Salesforce $CRM, Honeywell $HON, and Amgen $AMGN. JC wrote about why the Dow is so important to our process and what these changes could mean earlier this week, which you can read here.

In this post, we’ll take a deeper look at the impact of this restructuring by analyzing the relative strength trends of the new and old holdings. We’ll also discuss the Apple stock split, as it will also have major implications on the Dow’s future composition.

Long story short, we think the recent reconstruction of its constituents leaves the Index in a much stronger position for the future.

[Read more…]

[Video] “What The FICC?” Episode 4

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From the desk of Tom Bruni @BruniCharting

The Fixed Income, Commodity, and Currency markets are near and dear to my heart. Ever since I began learning Technical Analysis, I’ve always loved analyzing things that are “off the beaten path.” This included everything from Interest Rates to Soybeans to the Norwegian Krone. Equities are great and all, but this is the stuff that gets me up in the morning.

In addition to the blog posts we do on the site, I’ve wanted to explore new ways to share that passion with you all and show why even if you’re not investing in these markets directly, they’re worth paying attention to.

That brings us to my weekly show, “What The FICC?”

In this weekly video series, I’ll be highlighting the most important chart or theme from these three asset classes while doing my best to tie that analysis back to Equities through an intermarket signal or a trade idea.

This week’s episode is linked below, enjoy!

[Read more…]

The World Is Breaking Out: Here’s What We’re Buying

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From the desk of Steve Strazza @Sstrazza

Thanks to everyone for the feedback on this week’s Mystery Chart. We had a lot of good answers this week. Many respondents were cautious of the waning momentum but on balance, most of you were buyers. We are too.

It was a chart of the iShares MSCI Netherlands ETF $EWN which just broke out of a 13-year base to fresh all-time highs (shown below).

But it’s not just the Netherlands making new record highs, the All-Country World Index $ACWI just made new all-time highs as well. There aren’t many things more bullish than World Equity Indexes trading at their highest levels in history.

In this post, we’ll highlight the positive breadth characteristics we’re seeing within Global Equity Markets and outline trade setups in some of the strongest countries around the world- including the Netherlands, as a way to express our bullish thesis.

[Read more…]

[Options] Best Practices: Taking Risk Off The Table

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One of the things I preach in the All Star Options service is to manage risk by defining risks up front or having strict stop loss levels in place. And on the flip side of that equation, I also repeat over and over the need to remove risk from winning trades when given the opportunity — particularly in long call or put plays.

When holding long calls or puts, my rule of thumb is to always sell half of my position when I’ve doubled my money. [Read more…]

[Options] I’m on the Dow Train!

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Salesforce, Amgen, and Honeywell were all welcomed into the Dow Jones Industrial Industrial average this week. And all three are being greeted by enthusiastic investors. (Especially Salesforce $CRM!)

While the first two names are in sexy industries, don’t sleep on Honeywell $HON. Here’s what JC said in a recent post on the new Dow additions:

Here’s a chart of Honeywell, which I’m not sold on yet. I think it does break out, but I think this is only something to be long if we’re above 165. Below that and there is too much opportunity cost, I believe.

[Read more…]

Gold, Silver & Gold Stocks Heading Higher

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Gold made new all-time highs this summer. That was pretty cool. Hadn’t seen that in almost a decade.

Some people always like buying gold. They joined some secret society once where they convinced themselves it was part of a “diversified portfolio”. I don’t know what kind of strategy that is, but it was a really shitty one for a long time.

That all changed earlier this year when Gold Miners $GDX finally broke out above 31, which had been our key levels for years. And the metal itself broke out above 1580 or so which had been our equivalent level there.

Our initial price targets were hit last month so I called Sean over on our Options desk and he suggested an easy strategy to bet on a pause in this uptrend: When The Ducks Are Quakin’ (Gold Bugs), We Feed Them!

Our profit targets were hit today in this volatility fade in Gold.

You can learn more about All Star Options here.

So now what? Our upside targets were hit. Check. Then we bet on a pause. Check.

Let’s now take a step back. Has the fact that precious metals are in an uptrend changed? No.

Just because our initial upside targets were hit, does it mean we now ignore it completely? No.

In fact, I think we’re probably setting up for another leg higher in precious metals.  [Read more…]

Welcome New Dow Components! Amgen, Honeywell & Salesforce

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Don’t Fight Papa Dow

That’s how I learned it. You’ll hear my friend Ralph Acampora say that all the time!

“You Never Want To Fight Papa Dow”

My interpretation is that there is wisdom in the Dow Components. If you want to know which way the market is headed, focus on those 30 stocks.

I’m not going to get into the discussion about whether the Dow is the best index or not. I’ve made my case before and stand by it today more than ever. If you have a problem with Dow Jones or Standard & Poors, stop complaining about it and just go build a better index. It’s not that hard. We do it every day.

The Dow Jones Industrial Average, however, is a perfectly good index and gauge of stock market strength or weakness. One of the best parts is that there are only 30 components!

Hellooo??? Do you want to go through 500 stocks? Or 3000 in the case of the Russell3000?

Or just 30?

If all the charts of these indexes look pretty much exactly the same, doesn’t an easy 30 stocks make the most sense? [Read more…]

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