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All Star Charts

Expert technical analysis of financial markets by JC Parets

Using Relative Strength To Find Opportunities

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During Tuesday’s Members-Only Conference Call we discussed not wanting to be aggressively long or short stocks on an absolute basis. Our Five Bull Market Barometers continue to suggest this is a choppy, messy environment where we need to be very selective when putting capital to work. Cash/patience and uncorrelated trades like Gold continue to work for those who have the ability to stay out of the equity market.

Not everyone has that luxury though. Many fund managers have a mandate to be long stocks regardless of the market environment. Some may have the ability to short stocks against their exposure, but many are “long-only” and need to outperform in weak markets by owning the stocks that are going down less.

The easiest way to identify the types of stocks that are outperforming, as well as market-neutral opportunities for those with the ability to short stocks, is to use relative strength (ratio) charts. [Read more…]

[Chart Of The Week] Old Transports Vs New Transports

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From the desk of Steve Strazza @Sstrazza

JC summed up our present view on US Equities perfectly during this week’s Conference Call:

“There are stocks we want to buy, and there are stocks we want to sell,” he told Premium Members on Monday night.

Some areas, particularly the secular leaders coming into the selloff, continue to trend aggressively higher while others refuse to participate in any meaningful upside.

A great example of this is illustrated by contrasting the chart of the Dow Jones Transports (DJT) to what we consider the “New Dow Theory” Average, the PHLX Semiconductor Index (SOX).

[Read more…]

The Week In Review (05-15-2020)

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From the desk of Steve Strazza @Sstrazza

For the week ended Friday, May 15, 2020:

Every weekend we publish performance tables for a variety of different asset classes and categories along with commentary on each.

This week’s main theme is that the strong continue to get stronger and vice versa, which we’ll highlight in our Industry and Sector ETF tables, below.

[Read more…]

Five Bull Market Barometers (05-15-2020)

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Earlier this month we outlined the “Five Bull Market Barometers” we’re watching to identify the beginning of a new bull market in stocks.

In this post, we’ll update those charts without going into as much detail as to why they’re important. So if you haven’t read our initial post linked above, we’d encourage you to check it out.

With that said, let’s jump in and see how these charts have developed since.

[Read more…]

An Inflection Point For Both Stocks And Bonds

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From the desk of Steve Strazza @Sstrazza

This week’s Mystery Chart was a simple yet pivotal one… it was a ratio chart of Stocks vs Treasury Bonds.

With stocks struggling at resistance this week and Treasuries meandering beneath all-time highs, both appear to be at key inflection points.

Making things even more interesting is that the S&P 500 (SPY) relative to 20+ Year Treasury Bonds (TLT) ratio is also at a key level of interest. It is make-or-break time for these two asset classes so let’s dive in and see what’s going on.

[Read more…]

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