From the desk of Tom Bruni @BruniCharting

The media has been making quite the ruckus about 2018 and the "historic" volatility that the US Stock Market experienced, particularly in the fourth quarter. In this post I want to look at a few simple stats that help to put this past year's performance into its proper historical context, so that we can see whether or not it truly was a crazy year for stocks.

Just as the final week of the year -- the days between Christmas and New Year's Day -- are generally to be avoided by anyone looking to put new options trades on, so too are the first couple trading days of any new year. Especially this one. It was highly unlikely you were going to make your year by trading during the holidays, and similarly, there's no reason to believe that any trades you nail on the first trading days of 2019 will be memorable this time next year.

As I type this at 12:45am ET, overnight S&P Futures have already traded as high as +34  and as low as -25 from Monday's close. And I expect further indecisiveness to be pervasive during the first two full trading days in 2019. Sure, the nimblest of day traders likely will have a lot of action this week to make it worth their while, but those of us looking to put on options spreads with several weeks or months until expiration will best be served letting some of the nuttiness of the first 48 hours shake out. As such, we'll be sitting on our hands until the end of the week, waiting until Friday to put on our first new position of 2019 (stay tuned!).

Meanwhile, we do have...

Here is a list of trade ideas organized by date, ticker symbol and directional bias. Please make sure you have clicked on the link and read the details surrounding the trade before acting upon any of them. Also, make sure you have checked with your financial advisor and tax accountants to make sure you are suitable to be executing what is discussed on this website. The risk management procedures and targets are detailed for each idea. Please read and review the terms and conditions page before making any trades of your own.

Happy New Year everyone! We're happy you're here. 2018 was a great first year for All Star Options. We pulled some profits out the market in both directions, we had some fun, and its been an incredibly rewarding challenge for me personally to share my experience with all of you and teach you some of the tricks of the trade I've learned in my 20 years tackling the markets.

We always welcome questions from the community about existing trades, questions about position management, and questions about our insight into various scenarios and trade ideas. And as such, I thought I'd take some time today, as we head into the new year, to lay out the way we think All Star Options subscribers can get the most out of their experience here and address some common requests we receive.

From the desk of Tom Bruni @BruniCharting

This is going to be a quick post, but I wanted to share what I thought were some short-term positives from my review of our coverage universe.

As we wrap up 2018, it's time to forget everything that happened this quarter and this year and start from scratch. It’s irrelevant. We’re moving forward with fresh eyes. This is our Q1 2019 Playbook.

Part 1 of our Q1 2019 Playbook discusses big-picture themes, while this part focuses on the individual stock setups with the best reward/risk scenarios heading into the new year.

It's been a great couple of months for Bond bulls. As unprepared investors worry about their portfolios and financial media outlets irresponsibly call this market "crazy", we've been happy to watch the destruction of stocks and new flow of money into safer, fixed income assets. Interest rates have gotten slammed with stocks and bonds ripped. One for the good guys!

So the question now becomes, how low can rates go?

This is one of my favorite things to do: Forget everything that happened this quarter and this year and start from scratch. It doesn't matter what we did or how we felt in 2018. It's irrelevant. We're moving forward. This is my Q1 2019 Playbook.

While we couldn't be happier that U.S. stocks got destroyed this quarter, let's not forget about all of the other markets out there. US Treasury Bonds have had a very nice rally during this stock market correction, which is another move we're ecstatic about. And Gold and Silver have started to make moves to the upside as well, which is something we haven't seen in what feels like forever.

But today, it's the US Dollar that I think stands out and the recent move lower could just be the beginning. 

There are just a few days left in 2018 and it's tempting to make some last minute moves to improve your annual results in the old portfolio. But is it a good idea?

This is obviously not my first 'last few days of the year' experience as an active market participant. I know the feeling, trust me. I've made the mistakes. I've gotten cute. I've overextended myself in late December for absolutely no reason. It's those scars that I keep with me after all these years that remind me not to do it. It's like a kid with a hot stove. After he gets burned once, he won't ever make that mistake again!

The financial media loves to make you feel stupid for missing out on certain moves. Your friends and neighbors like to remind you about how well their portfolio is doing and all of their brilliant investments. It's easy to get caught up in this nonsense.

I like to observe. It's amazing how much you can learn if you just shut the F&$% up and pay attention. What are the most successful investors doing this time of the year? Are they pressing their trades and initiating new ones? Or are they spending time with their friends and family? Are they running office...

From the desk of Tom Bruni @BruniCharting

From a public markets perspective the Marijuana Industry is small, so small that it could go to zero tomorrow and nobody would notice. In late August we started covering the space after receiving a lot of reader requests, so as we close out 2018 I wanted to share one chart that perfectly summarizes the boom and bust it's witnessed over the last two quarters.

U.S. Stock Markets will only be open for a half day tomorrow Monday December 24th for Christmas Eve and closed on Christmas Day. And the following week will follow a similar pattern, being completely closed on Tuesday, January 1.

And the muck in between is no-man's land, especially given the market we're current in as best described by our pal Howard Lindzon: "This is one shitty market."

Unless you've got positions in distress that need defending in this sloppy, bearish tape, it's best to sit on the sidelines and wait until Wall Street gets back to work for real after New Year's Day. As such, we will not be adding any new positions to the All Star Options portfolio this week.

We're fortunate

From the desk of Tom Bruni @BruniCharting

In this post I want to share two charts from the weekend update of our Market Internals workbook, both of which confirm the continued deterioration in breadth as US Stocks make new lows.

Somewhere along the way, a large majority of U.S. citizens convinced themselves that the market owes them something. They think that if they "invest" in the stock market, that they've somehow earned the right to make money over time. I'm not sure if it's the financial advisors feeding them self-serving garbage based on their tiny sample sizes. It could possibly be the financial media constantly making their viewers feel stupid for missing out on a trade or a long-term trend. These vultures use headlines like, "If you had invested $10,000 in X on this specific date you would have easily earned Y in that short period of time". They're proving to us how worthless they are. It's poison.

At what point do investors hold themselves accountable? It's never their fault for losing money. It's the Fed's fault, it's the Trump's fault, it's my neighbors fault who "made" me buy bitcoin.

It's YOUR fault if you lose money. We have no one to blame but ourselves if our "investment" account loses 10%, 20%, 50% or even much worse in the case of things like crypto currencies, precious metals or recent IPOs like Snapchat. 

From the desk of Tom Bruni @BruniCharting

Yesterday after the bell we sent out our Year End '18 ETF Risk Update to our Institutional Clients, covering 100+ of the most actionable and informative charts. To put this report together we examined over 500 inter-market and cross-asset relationships across weekly & daily time-frames to identify trend direction, momentum, risk-management levels, and prices targets.

In this premium post I want to highlight a few charts from each of our five sections: Factors, International, Domestic, Fixed-Income, and Thematic/Niche. If you like what you see and want the full report, you can fill out our Institutional Client Application or contact our Head of Institutional Sales, Jonathan Bloom, for access.

Without further adieu, let's look at some charts.

The market is a beautiful thing, particularly the analysis of supply and demand behavior. I'm incredibly fortunate to be a practicing Technician for almost a decade and a half and have become good friends with some of the best that ever did it. I will never take that for granted.

These relationships are part of the reason I started a podcast on Technical Analysis Radio, which is now almost 40 episodes deep. Before the podcast, I started hosting the annual Chart Summit, which was the very first 100% virtual Technical Analysis conference. Market participants all over the world were able to tune in the past 2 years from the comfort of their own homes and watch some of the best Technicians in the world discuss their process and apply them to real time market behavior. I was in Hong Kong last year and someone stopped me and told me they skipped the Chinese New Year celebration in order to watch the Chart Summit. This is the type of feedback we've been getting. You can still go back and watch all...

Bonds funds did a good job of getting everyone on the boat leaning one way, only to reverse and slam them in the other direction. The whole world seems to think interest rates have no where to go but up. However, those of us who follow the price of bonds know that reality has been sending us a different message.

The recent failed breakdown in $TLT (the 20-year bonds ETF) is a perfect example

Having Trading Psychologist Dr. Brett Steenbarger on the podcast was a huge treat for me. He works with the best traders on planet earth on a daily basis. Needless to say, when Dr. Brett is telling me something, I want to listen. In this episode, he let me ask him all the questions I was curious about and he happily answered them all with solid advice and relevant anecdotes. We make a lot of mistakes as investors because of our many flaws as humans. When our stress levels are elevated we start acting emotionally, instead of rationally. Taking losses is a difficult task for us, even though we all know that losses are part of the deal. I really enjoyed this conversation and it could have gone on forever if I didn't end it. I hope you get as much value from this chat as I did.

Bonds Funds are breaking out to new 3-month highs. This comes after consensus this September was for higher US rates, and therefore, lower prices for bonds. When the market is leaning too much in any one direction, the unwind of that extreme positioning can be intense. That's what I believe has been happening throughout the 4th quarter.

Here are two charts that show rates could continue lower for some time. The first is a long-term chart of the US 10-year Yield failing to break out above the downtrend in place since 1981:

Coming down the homestretch of 2018 and Mother Market sure is making it interesting. Will a "Santa Claus" rally save global stocks? Or is the Grinch quietly whispering in her ear?

Speaking of the Grinch and classic holiday movies, my family's Netflix consumption has been on the rise this holiday season. But as we know, the stock market is a forward looking mechanism and the outlook as foretold by prices is suggesting that softness is ahead for $NFLX stock.

This being the holiday season and all, you'd be forgiven if you didn't want to put on any new risk heading into the New Year. But for those of us still standing in the ring ready to do battle, $NFLX is streaming a tasty short play opportunity.

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

This month’s Conference Call will be held on Tuesday December 22nd at 7PM IST. 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 our launch.

Here are the details for Tuesday: