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?

What do we know about new all-time highs? We know they're not a characteristic of a downtrend.

I often get that guy that comes to me and says, "Well every new downtrend must start from a new high". Yes, and that must be a great way to go through life.

You see, markets trend. That's why Technical Analysis works. That's why this is so valuable. Because if you can recognize the direction of the underlying trend, you're already way ahead of the pack. The likelihood for a trend to continue in its path is exponentially higher that for it to reverse. A 4-year old can recognize if a chart is going up, down or sideways. It's the adults that have more trouble with this.

As I went through all my weekly charts this weekend, I noticed an interesting underlying theme: New Highs.

One of the most powerfully bullish patterns that I know involves an instrument which gaps higher on explosive volume, builds on those gains for a day or so, then spends the next week or two consolidating those gains on declining volume. This price action tires out the fast money that entered the game on the breakout and attracts opportunistic bears looking for a reversion back to the mean. The chart pattern begins to resemble a coiled spring. And when it Pops!? -- the next move can be powerfully higher and sustainable.

We've got a situation like this developing now.

From the desk of Tom Bruni @BruniCharting

The Dow Transports are the talk of the town due to their lack of trend on an absolute basis and their underperformance relative to the Dow Industrials, so I want to take a quick look and see if there are any themes we can take advantage of within its subsectors.

One of the more compelling opportunities in the All Star Charts Q3 Playbook centered around the Rails sector. Several stocks there are setting up for big moves, and with an accommodating economy, I don't see how rail stocks won't start participating soon.

The weakness in Consumer Goods we've been talking about since March and April continues, so today we want to look at a short opportunity in Godrej Consumer Products, which makes up roughly 5.50% of the Nifty Fast Moving Consumer Goods Index.

We live in a global market environment. There are still people out there who think that stocks in the United States go up or down because of what is happening in the United States. I think in order to properly identify the trend in stocks as an asset class, we have to look all over the world. In this video we do just that!

From the desk of Tom Bruni @BruniCharting

JC beat me to writing about Interest Rates this morning, but while I came to the same conclusion I wanted to add some additional perspective that shared on Real Vision this past Monday.

While that segment was about Mid-Cap Industrial stock Herman Miller Inc., a big part of that thesis is that we're seeing US Rates begin to stabilize.

The chart I want to share today is the Regional Banks/REITs ratio, which highlights an "Interest"-ing divergence between Equities and the Bond/Commodities markets.

From the desk of Tom Bruni @BruniCharting

We've been talking about the rotation into Mid-Cap Industrials since April, but Monday I sat down with Jake Merl for Real Vision's "Trade Ideas" show to discuss a long-term breakout in Herman Miller Inc. (MLHR).

Below is the video discussing my thesis for this trade. I hope you enjoy!

I think there is a big move brewing in the U.S. Treasury Bond Market. US Interest Rates have gotten crushed along with rates all over the world. It's not just a U.S. thing, but a global phenomenon. 

Yesterday, the All Star Charts team published a bullish piece on the New York Times $NYT, suggesting the stock has the potential to leap as much as 50% from current prices. For those of us interested in leveraging this bullish idea using options, you'll like what I have in store for you today.

Here's the chart that has us excited:

If you're familiar with our analysis, you've probably noticed that Fibonacci Extensions and Retracements play a vital role in our process.

From setting upside objectives to identifying areas of potential support and resistance, Fibonacci is a versatile tool.

As with any tool, there are times when it works better than others. And while we don't want to get into every intricate detail of how and where we use it, we did want to share a great example of Fibonacci in action.