From the desk of Tom Bruni @BruniCharting

Telecom continues to hold up well, sticking with the "reach for yield" theme we've been discussing month in and month out for a while now.

Let's take a look at the ETF and a few individual names we want to be buying to take advantage of this trend.

The "Gap and Go" pattern is popular with intraday and swing traders. It is a situation where a stock gaps higher out of a base (often earnings driven), then punishes the opportunistic faders who are playing for the stock to come back and "fill the gap." The opposite happens, resulting in a slow, painful grind higher hurting all those short holders.

We've got such a situation developing in the semis space, where a slow grind up has beaten all the faders to a pulp and now it appears we might be setting up for one final push to inflict hurt on the final stubborn bears.

"JC I only trade U.S. Stocks" 

"Who cares what Belgium is doing"

"Indian bank stocks? Why are you looking at those?"

Stocks in America don't go up and down because of what is happening in America. Stocks in America go up and down because of what is happening all over the world. This relationship also applies to bonds, commodities and currency markets.

Today I want to focus on what we're seeing globally so we can make much more informed decisions about the current trend. Do we want to be buying stocks or do we want to be selling them?

In today's video I sit down with Phil Pearlman to discuss Phone Addiction. Many of us are unaware and even more people don't even care to be aware. Is it the power that we have in our phones? Or do the phones have the power over us? Phil offers some advice on this front and shares what he's been doing.

One of the most important parts of my process in selecting potential options trades is to assess the current volatility situation. Everything else being equal, I like to put on trades that position myself for volatility to revert to its mean. In other words, if volatility is high and therefore options prices are high, I want to express my directional trade in such a way that it might also benefit from volatility falling back to "normal" levels. Conversely, when volatility is low, I want any position I consider to benefit from a rise in volatility -- if there is one.

There are no free lunches on Wall Street, nor in options trading. But betting on volatility reverting to the mean might be one of the closest things to it. The trick is in the timing.

Of all the most liquid ETFs I track, the one that has been the quietest lately -- in terms of price action and volatility in options pricing -- is the Retail Sector ETF $XRT. In fact, volatility in $XRT is currently at the lowest levels last seen in 2018 before the Christmas selloff. This has given me a wild idea...

From the desk of Tom Bruni @BruniCharting

The market remains a “hot mess", so we’re looking under the surface at breadth and risk appetite measures to identify clues as to the potential direction that this 15-month range will resolve itself.

Today I want to look at one of those measures, Consumer Discretionary stocks vs Consumer Staples.

If you're a long-only fund manager that believes the market is headed higher, you're going to be in more aggressive areas of the market like Discretionary. If you believe the market is headed lower or isn't going to do much, you're going to be in the lower beta, often higher dividend Consumer Staple stocks.

So what's happening in these sectors right now?

The Equal-Weight Consumer Discretionary vs Equal-Weight Consumer Staples continues to struggle with a flat 200-day moving average and confluence of support/resistance, but just made new 6-month highs this week. While this chart still work to do to confirm an intermediate-term uptrend, this is extremely constructive action and is suggesting that risk appetite among market participants is beginning to pick up.

Click on chart to enlarge...

I've been talking markets with Liz Claman for the better part of the last decade. Whenever I'm in New York, I like to swing by the FOX studios to say hello. This week we discussed the relative strength in Semi's and how I think they will lead stocks and the S&P500 to new all-time highs.

Here is the clip:

In light of DowDuPont's $DWDP recent spinoff of Dow $DOW, it makes the maths a little more complicated on our trade.

Here is the press release from the OCC: https://t.co/QhpJMykSi8 (click the link then launch the pdf)

The short story is this: $DWDP investors are now entitled to one share of $DOW each every 3 shares of DWDP held.

This means that the true value of our options is price of DWDP stock + one third price of DOW stock (approximately).

I'm in New York this week for the annual CMT Association Symposium. I always learn so much at this event, not just from the presentations, but from the attendees themselves. A lot of smart folks in one room is a win for all of us.

Tuesday I was up at the Nasdaq to chat with Catherine Murray about the S&P500, my favorite Semiconductor names and where we are in Canadian Equities and Crude Oil.

Here is the video in full:

In Texas, it's often said: "Go Big or Go Home."

We intend to do just that with a simple options play in a State of Texas namesake.

Last week's Chart of The Week discussed the "One More High" type setup we often see  prior to price consolidations or pullbacks, providing some context around why we continue to remain structurally bullish, but not very aggressive in the short-term.

Friday we got new Monthly Candlesticks, so this post will outline a few of the major changes since last month.