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Expert technical analysis of financial markets by JC Parets

RPP Report: Review. Preview. Profit. (08-11-2021)

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From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return 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 to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

We’ve been pretty obnoxious about our position that markets are a total mess these days. While this remains the case, we’ve seen some positive developments play out lately… particularly the renewed strength from cyclicals and offensive assets.

We’ve covered the best evidence from both the bulls and bears camp in recent months, and even played devil’s advocate with the data we have. We continue to track and point out the most important upside and downside resolutions across global markets. And we keep pounding the table on two major themes (among others):

  • The market is messy and full of mixed signals.
  • Many significant risk assets are currently trading at or below critical resistance levels. [Read more…]

All About the Dollar

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From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The US Dollar Index $DXY has been a good reminder that price doesn’t always move in a straight line. 

Paul Tudor Jones has been quoted saying “markets only trend about 15% of the time.” The textbooks will tell you it’s somewhere between 20% and 30%. But it all comes down to how you’re measuring it.

We think it’s fair to say most markets trend about 25% of the time on a structural basis.

And the present year two market conditions have been a great illustration of what they look like the other 75% of the time… range-bound… sideways… a hot mess.

Speaking of which, last week, we pointed out that Dollar strength had stalled and that things were beginning to look messy on shorter time frames. 

Many of the long USD trade setups we laid out in late June have yet to break out and are currently testing their respective risk levels, with the lone exception of the AUD/USD.

Mixed signals and indecision remain the case for the Dollar as DXY attempts to find its footing and take out the upper bounds of its year-to-date range… again.

Given the far-reaching impact the Dollar can have on risk assets around the globe, let’s take a step back, discuss the recent price action, and identify some critical levels of interest.

[Read more…]

Follow The Flow (08-09-2021)

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From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: Because they think the stock is about to move in their direction and make them a pretty penny.

Then we flip through our list of stocks flashing unusual activity and pick the best setups using many of the same technical filters we do for our other scans. And just like that, we’ll follow the money flow and fatten our own pockets along with some of the world’s most powerful financial institutions.

[Read more…]

Nobody Wants Your Rocks

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The market has spoken.

You might have your conspiracy theories about market manipulation or inflation or whatever story they’re telling these days.

But it’s only the price that pays. We just want to sell things at higher prices than where we buy them.

And you’re going to have a hard time finding a worse investment over the past year than Precious Metals. [Read more…]

Under The Hood (08-09-2021)

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From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest “Under The Hood” column where we’ll cover all the action for the week ended August 6, 2021. This report is published bi-weekly and rotated on-and-off with our “Minor Leaguers” column.

What we do here 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.

Watch this video for a “behind the scenes” look at our process.

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…]

Self-fulfilling Idiocy

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“JC, Technical Analysis is just a Self-fulfilling Prophecy”

Where do I even start…

I just can’t with this one.

A statement that technical analysis is self-fulfilling is suggesting that there are events in the free market that are caused directly or indirectly by the preceding prediction or expectation that it was going to occur by a group of market technicians.

Seriously?

Is Bill Gates sticking chips in our arms too?

Is the Earth Flat? [Read more…]

Filed Under: ASC

[Video] Technical Analysis w/ Josh Brown & Michael Batnick

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I only live about an hour from New York City, but it was my first time back since March 2020. It felt good.

Manhattan had been my home for over a decade before I moved to California in 2015. I’ve been back on the East coast now for about a year and a half, but haven’t been able to enjoy NYC for obvious reasons.

It was good being back. The sushi there is on another level. You don’t get that sort of thing in the suburbs.

Anyway, I dropped by to see my friends at Ritholtz Wealth Management to talk all things markets, technical analysis, finding the strongest stocks and how the Heat & Knicks did in the offseason.

You can check out the complete podcast episode here, or watch some of the highlights in the video below:

[Read more…]

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