From the desk of Tom Bruni @BruniCharting

Every so often we hear the narrative that under-performance from China's stock market is a canary in the coal mine for US Equities, and the recent tariff tantrums have brought this discussion front and center. Today I want to look at this relationship to see if it has any merit or if it's just a smart sounding soundbite that you can use around the office water cooler.

I won't pretend to know anything about medical devices, how they're built, or why they work. But that doesn't mean we can't profit in the sector.

The Medical Devices sector as a whole is trading at all time highs, and one particular name is setting up a screaming buy opportunity.

From the desk of Tom Bruni @BruniCharting

We've been extremely vocal about the Medical Devices space on the blog, and rightfully so, with the sector continuing its long-term trend of out-performance throughout 2018. The index has 57 components, but because the top 10 stocks make up roughly 60% of the index, opportunities in the smaller components tend to be overlooked by many market participants. In this post I want to look at all of its components and highlight names where our risk is well-defined and the reward/risk is still skewed in our favor.

Let's start off with the sector ETF $IHI on an absolute basis for context. Prices are just off all-time highs after successfully retesting their breakout area near 203.50. As long as prices are above that level, short and intermediate-term momentum remains intact and our next upside objective is up near 248-249.50.

Click on chart to enlarge view.

On a relative basis, the sector continues to digest its strong year-to-date gains and work off a bearish momentum divergence by...

Most Nifty Indexes' largest components have a very large weighting on their performance, and Nifty Pharma is no exception. Sun Pharmaceuticals represents roughly a quarter of the index, so today we're going to look at it's role as a potential leading indicator for the rest of the sector.

Below is a daily line chart of the Nifty Pharma Index overlayed with Sun Pharmaceuticals. What we see from this relationship is that Sun Pharma generally leads the index, so when it's showing relative strength a move higher is likely, and when it's showing relative weakness then a move lower is likely. The two rarely separate from each other for long.

Why this is relevant to us now is because in May when the index undercut its August 2017 lows, Sun Pharmaceuticals actually held those lows and has been showing relative strength ever since. With history as our guide, this suggests that we may want to be looking for a move to the upside in both Sun Pharmaceuticals and the sector as a whole.

For some additional context, here is a daily chart of Sun...

From the desk of Tom Bruni @BruniCharting

Interest rates are on the move, with the Ten-Year Treasury Yield breaking 3% once again after working off its failed breakout attempt from May. One relationship that's highly correlated with the Ten-Year Yield is Regional Banks vs REITS. We've written about this relationship in 2016 and 2017, but it's at an important inflection point so today's chart is going to revisit it.

This conversation with Mark Dow kicks off Season 2 of the All Star Charts Interviews sponsored by Investor's Business Daily. Mark worked for the U.S. Treasury Department in charge of Emerging Markets in the early 90s and later was a sovereign analyst at a Mutual Fund before ultimately running money for a Global Macro Hedge Fund in New York City. Today, Mark runs a Family Office from southern California and recently launched a Private Twitter Account that you can subscribe to called Behavioral Macro. In this Episode, we talk about the benefits of Technical Analysis throughout both process and execution, where we are in the...

I'm really excited to share with you guys that I will be coming to Texas in early September for a series of events put on by the CMT Association. I will be speaking at the Dallas Chapter on September 4th, Austin September 5th and Houston on September 6th.

Each of these events will be free to both Members and Non-members of the CMT Association, so everyone is welcome. Here are the dates and details:

It's the end of the month, which means we've got new monthly charts. Last month we discussed the strength in large-cap Financial Services, Consumer Goods, IT, and in certain areas of Pharma, while the weakest areas were mid and small-cap Infrastructure, Metals, Commodities, Realty, Media, and Autos. This post is going to discuss any significant changes from last month, but members can find the rest of the updated charts in the Chartbook.

The strength in large-caps continues, as shown by the Nifty 50 making a new all-time closing high. This month's candle opened at the lows and closed at the highs, signaling a continuation of its uptrend after 6 months of consolidation. If prices are above 11,165 we want to be long as our next price objective us up near 15,260.

The Nifty 100 closed at new all-time highs, opening at the lows and closing at its highs. If prices are above 11,200, our price objective remains 12,640.

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I could not be more thrilled that it's the end of the month for one reason alone: Monthly Candlestick Charts. They get me every time! It's easy to get lost in the every day noise surrounding the market. The chart review I do heading into the first of every month is one of the most important parts of my process. It brings me home. There's no better way I know to maintain composure and recognize trends than this monthly music and chart session!

Since June of 2017 when the S&P500 broke out above 2400, we've had a target of 3000. After close to a 4% rally in the S&P500 Index this month, we went out just 6 points from a new all-time high monthly close. This is not any evidence we think suggests anything has changed. To the contrary, higher prices are things we expect to see in an uptrend:

What is really interesting is what is currently happening with the Dow Jones Averages, both the Industrial & Transportation Indexes. First, let's start with the Transports because they just went out at a new all-time monthly closing high. Our target near...

51 days until expiration is the sweet spot for putting on delta neutral income trades. "Income Trades" are best established in underlyings experiencing elevated levels of volatility (resulting in higher options prices), but that are stuck within a price range. The thinking here is that volatility is likely to revert back to the mean and the underlying is likely to stay within it's current range. Inertia, ya dig?

In coming weeks, All Star Options will be unveiling an Income Trades Heat Map which will help direct you towards the best ETF candidates for putting on these trades whenever you're interested.

In the meantime, we've got a trade from the top of this list ready to go.

Based on the great feedback we receive every day, we know a lot of Allstarcharts India readers have an interest in the mid-cap and small-cap segments of the market. Typically we cover those areas in the Monthly Conference Call, followed by a deep dive (or two) on anything that we didn't have time to discuss. Additionally, we publish shorter posts throughout the month highlighting opportunities as they emerge.

While a good start, we wanted to create something to provide more regular coverage of the space, so we've added nearly 100 mid and small-cap stocks to the Chartbook feature of our site. To narrow this universe down to a manageable size, these lists include those stocks that are available to short via futures and/or options, so that we can provide consistent analysis on both sides of the trade as we do in the other Chartbooks.