From the desk of Tom Bruni @BruniCharting
Today we’re looking at two Commodity charts that offer both intermarket signals and potential trading opportunities.
Momentum Problems Remain
We’ve been writing about the lack of trend in India and Equities around the globe for months and despite the breakout to new highs in the Nifty 50 and several Large-Cap stocks, we remain cautious about calling this a “confirmed uptrend” and getting overly aggressive on the long side.
In this post, we’ll explain why this remains a two-way tape.
[Chart(s) of The Week] Two Major Breakouts
While updating our Members-Only Chartbooks today we came across two major breakouts that need to be pointed out as they play key roles in the Infrastructure and Public Sector Bank Sectors.
Let’s take a look.
Canada Update
From the desk of Tom Bruni @BruniCharting
On May 1st, we wrote an update called “Canada or Cantada” going through the major sectors/indexes to provide a view on how we wanted to approach Canadian Equities.
Chart Of The Week: Don’t Fight Papa Dow
Life can be simple or you can make things complicated and noisy. It’s up to you.
What business are you in? The business of trying to make money in the market or the business of making and/or consuming noise?
I was out in Greece on my honeymoon for a couple of weeks last month, but I was keeping an eye on what was going on. I love the market and I enjoy observing human behavior. So why should I completely shut myself off from something I like doing?
Now that I am married, I would very much like to keep my wife happy, and I also think it’s important to get away (see here). So appropriately I shut things off and enjoyed my time in, what are now officially, my favorite islands in the world. It was funny because some of the locals in the Cyclades Islands were telling me how much they wanted to go to the Caribbean. I was like, “Naw man, stay here. Trust me!”
What I noticed from far far away is how noisy the market place can be if you let it. My friend Josh wrote an excellent piece this week about how he takes control of the type of media content he consumes. I thought it was really well written and I agree with almost all of what he had to say. Check out: Why I Don’t Wake Up To The News. From beautiful Mykonos and Naxos and Santorini, I was checking in on the markets, because that’s what I do, phoning into our desks to see what they were seeing and observing commentary on the twitter, from both intelligent market participants and noisy members of the media. The drama I witnessed was fascinating, especially looking at it from the outside.
Not just in times like this, but really every time, I think it’s important to take a step back and really see what is ACTUALLY happening in the market. I think the best picture of what is truly taking place is the behavior of the Dow Jones Industrial Average. The way I learned it was, “Don’t fight Papa Dow”. The market doesn’t always have to be trending up, or trending down. It doesn’t always have to be a top or a bottom. Most of the time, it’s just in the middle. And sometimes, like it has been since early 2018, the trend is actually sideways. And what’s wrong with that?
Here is the chart of the Dow using my new favorite data platform Koyfin: [Read more…]
[Premium] A “Beautiful” Long Opportunity
From the desk of Tom Bruni @BruniCharting
Stocks showing relative strength in this environment remain on our radar since the list of them has shrunk day by day over the last month.
For our Institutional Clients, we provide more tactical trade ideas or “plus-ones” that don’t necessarily fit a broader theme but are still an attractive opportunity worth exploring.
Today I want to share one of those ideas from a subsector of the market that may surprise you…Retail.
[Options Premium] Hug That Line
The drama queens have been in full force this weekend coming into the opening of trading this Monday morning. Here was my observation after rolling out of bed:
Geez, I shoulda checked $ES_F before I checked my twitter stream this morning.
FinTwit: THE MARKET IS CRASHING. ARMAGEDDON!!!
Futures: Down 6. Barely a rounding error.
Back to bed.
— Sean McLaughlin, NLD 📈 (@chicagosean) June 3, 2019
I rarely seek to be contrarian simply for the sake of being contrarian, but the mini hysteria I’m sensing amongst market participants feels a little hollow. Is everyone too leveraged? You’re not trading based off headlines are you? …are you??
If so, knock it off. Scared money don’t make money.
With the S&P 500 re-acquainting itself with it’s 200-day moving average, here’s how we’re going to play it… [Read more…]
[Charts of The Week] Finding Alpha In Flat Markets
From the desk of Tom Bruni @BruniCharting
Wall Street is a game of relative performance and we each are tasked with our own mandates/constraints in managing our portfolios.
The good news is that even when the market is a hot mess on an absolute basis, there are still plenty of ways to find performance within the context of those constraints.
If you need to have most of your capital allocated most of the time, then your focus is on either avoiding/shorting areas of relative weakness and owning areas of relative strength.
If you have the flexibility to raise cash and go to the beach or have short exposure on your books, that works too.
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