Expert technical analysis of financial markets by JC Parets
by Tom Bruni
Tuesday I posted a mystery chart and asked you all to let me know what you would do. Buy, sell, or do nothing. Many said that it looked like the long-term downtrend was intact, but that you would wait for a downside resolution from this range before acting. I agreed.
So today, I want to reveal the full chart and share why I feel it’s relevant.
by JC
When you hear people talking about Dow Theory, it usually revolves around what the Dow Industrials and Transports are doing and whether they are diverging or confirming one another. I want to be perfectly clear that while this is certainly one of Charles Dow’s tenets from the late 1800s, this is just one of many, and not even in the top 5, as far as I’m concerned. I encourage you to check out my post: Everything About Dow Theory.
Today, we are indeed going to focus on the behavior of the Dow Jones Industrial Average and Dow Jones Transportation Average. Earlier this week we discussed the Dow Jones Composite, which includes the 15 stocks in the Dow Utility Index as well. For this conversation we’re analyzing just the Industrials and Transports. [Read more…]
by Tom Bruni
From the desk of Tom Bruni @BruniCharting
Tuesday I posted a mystery chart and asked you all to let me know what you would do. Buy, sell, or do nothing. Most of you said you’d be short or doing nothing until the range resolves lower, while only one or two of you said you’d be long with a tight stop or were waiting for an upside break.
Given how closely this chart resembles the S&P 500 or other major US Indexes, I wasn’t surprised by those responses. It still feels like many people have a short bias, so continued churn at current levels or a slow grind higher could leave a lot of people left behind.
Anyway, here’s the actual chart and why I feel it’s relevant.
Tuesday was only one day but it felt like it may have offered us a clue. The major indices — S&P 500, NASDAQ, Dow, Russell 2000 — all experienced notable pullbacks. Perhaps the first notable pullbacks we’ve seen in at least two weeks.
Now does this mean we picked the top and we’re about to run back down towards the bottom? Of course not. What this likely signals is that we are about to set into a little choppy-churn range for the next month or two. [Read more…]
by JC
There are many ways to gauge the strength or weakness of the U.S. Stock Market. For us, there isn’t a single “best way” to do it. The advantage we have is that we just analyze all of them. There are over 50 charts in my U.S. Stock Market Indexes workbook alone.
But today I want to focus on an interesting chart that I don’t think gets the credit it deserves: The Dow Jones Composite Index. I really like how it represents all of the stocks in the 3 major Dow Jones Indexes: Industrials, Transportation and Utilities. If you want a broad measure of the most important stocks in America, I think this is it. [Read more…]
by Tom Bruni
From the desk of Tom Bruni @BruniCharting
Last week was our first Mystery Chart and Reveal Post of 2019.
This week we’re doing that same exercise with a new chart, x and y-axes and and all labels eliminated to minimize bias. As a reminder, this chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.
For those thinking “I know what that is!”, I’ll save you the time and say you’re wrong. Instead, tell me what you would do with it right here.
Buy, Sell, or Do Nothing?
by Tom Bruni
Last week was our first Mystery Chart and Reveal Post of 2019.
This week we’re doing that same exercise with a new chart, x and y-axes and and all labels eliminated to minimize bias. As a reminder, this chart can be any security in any asset class on any timeframe on an absolute or relative basis. It can even be inverted or a custom index.
The point here is to not guess what it is, but instead to think about what you would do right now. Buy, Sell, or Do Nothing?
by JC
Picking tops and bottoms in the market is really hard. Some people claim they can do it and we’ll let them. It’s those types of people who help create the arbitrage between the aware and the unaware.
Markets are rarely ever putting in a top or a bottom. Most of the time they’re just somewhere in the middle. For years I’ve told my friend Josh that his best blog post ever was one from 2012 which he titled, “Tops, Bottoms and Middles”.
He wrote, [Read more…]
