From the desk of Tom Bruni @BruniCharting

Two weeks ago I wrote about the downside resolutions in Treasuries and Yen and the questions we would be asking in the days following. Given their rallies in the last week, we continue to ask those questions and observe what messages these "safe haven" assets are sending about the market.

This week's talk of the town is the "Island Reversal", and rightfully so, as some of the world's strongest indexes are sporting this pattern.

Let's take a look and get into what it could mean for the days/weeks ahead.

From the desk of Steve Strazza @Sstrazza

It's been a close your eyes and buy anything market, particularly the past few weeks as even the most hard-hit areas experienced monster rallies. That appears to be changing this week with the biggest 1-day down move in the S&P since mid-March as well as the largest single-day spike in volatility since February 2018.

Last week we highlighted the healthy rotation into cyclicals. We pointed out that the secular laggards and areas that had suffered serious structural damage were now outperforming, and by quite a wide margin.

We used this scatter plot of our Dow Jones Industry universe to illustrate this price action.

The first thing we want to do when analyzing any asset, crypto or otherwise, is identify the direction of the primary trend. In the case of Bitcoin, the trend for the lifetime of this asset is clearly: Up.

Look at this pattern of Uptrend, Consolidation, Breakout, Uptrend, Consolidation, Breakout, Uptrend, Consolidation, Breakout, Uptrend, Consolidation.....

The next step in this pattern is Breakout right?

From the desk of Steve Strazza @Sstrazza

We’ve written extensively about the split market we’ve been in for the better part of the year, as the same leaders coming into the Q1 crash emerged as the strongest areas coming out of it. Over the past 3-4 weeks we’ve seen some major mean reversion and much-needed participation from the cyclical sectors which have been lagging for years now.

This is constructive rotation and a major positive for bulls as we’re going to need to see this type of breadth expansion if this rally is to have legs.

While this is an encouraging development, there’s one thing that hasn’t changed at all. With all the focus on Financials, Industrials and Energy recently, Tech seems to have been forgotten a bit, but it’s still by far the best game in town.

These are the registration details for the monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Monday June 15th at 7PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday:

From the desks of Steve Strazza @Sstrazza and Tom Bruni @BruniCharting

In this post, we're going to share 10 of the most important charts we're looking at right now. Some are merely for observational purposes or to highlight some of the broader trends at play in the markets while others are trade ideas in some of our favorite names and areas.

Let's dive right in. Here they are.

There are no called strikes on Wall Street. In other words, we're not penalized for not swinging, like you are in baseball. We have the ability to be patient, to a certain extent at least, depending on your mandate. But most of us don't have mandates! Even one of the best hitters of all time struggled when he swung at bad pitches. In this video we compare Ted Williams' batting average when he swung at good pitches, vs when he swung at bad ones.

This is my favorite reminder that in trading & investing, we want to wait for OUR perfect pitch, and then swing, vs just swinging at anything. 

This explanation is taken directly from Lesson 5 in our NEW Allstarcharts Charting School:

From the desk of Tom Bruni @BruniCharting

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

Hard to believe some low volatility setups are appearing all over the place, but that is the market we are in. The "bull market" in stocks continues higher, seemingly unabated. Who am I to fight it?

And where else should we play but in names that continue to benefit from the "work-from-home" and social distancing mindshift that is happening on a global scale? Like Social Media.

From the desk of Tom Bruni @BruniCharting

From a Precious Metals' perspective, Palladium has been a clear leader for over a decade. Despite its strong long-term performance, a sharp March drawdown has people wondering whether this is the end of  its reign over the Precious Metals' space.

In this post, we're going to outline our "keep it simple stupid" approach to answering that very question.

Let's jump into it.

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, June 5, 2020:

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

This was a big week for market bulls as a myriad of consolidations resolved to the upside while the powerhouse Nasdaq 100 $QQQ finally became the first major index to reclaim its all-time highs. The only assets to post negative returns this week were the usual "safe-havens" such as Treasuries, Yen, and Precious Metals. Everything else was green. How's that for improving risk-appetite?

In this post, we'll highlight that this broadening participation and flight towards risk-assets is more than just a one-week phenomenon. We've seen this type...

Do you know when stocks making new 52-week relative lows is actually bullish? When we're talking about Consumer Staples.

You see, when the market is falling apart, you're going to see a sympathy bid, specifically on a relative basis, into Consumer Staples. In other words, no matter how bad things get, we're still going to drink beers, smoke cigarettes, brush our teeth and wash our dishes. Those things won't change. We call them Staples.

On the flip side, when stocks are doing well and the major indexes are in uptrends, or bull markets if you want to call them that, Staples are going to underperform. Their safer-haven status and lower beta components tend to lag during the good times.

You can see that here: