I've learned a lot of things and met some amazing people during my trips to India over the years. One of them is the original meaning of the word "Guru".

You see, in America it definitely has a negative connotation. Most people I speak to don't even know what "guru" actually means. For us, it's usually a charlatan-type that no one likes. They usually know less than most and typically do much more harm to their audience than good. You'll often see them buying twitter followers and spamming your LinkedIn messages.

In marketing parlance, they refer to the "Guru" as the guy (usually male) who they spend all their time on marketing and making them look good. The better and smarter the “guru” appears to be, the more money that comes in, and the more profits for the marketing company, regardless of how completely full of it they actually are.

In America, whenever you hear, "Financial Guru", usually you want to run away as fast as possible.

But the truth is, Guru Purnima is one of the most beautiful concepts I've ever learned about. This unique festival on the...

I find myself on Zoom calls all the time. How about you?

Did you notice that the Communications Index is pushing up against new all-time highs? Did you notice that during the March decline, communications held above their late 2018 lows?

I think all of this points to us paying a little more attention to what's going on in the space.

First of all, check out the Communications Services Index holding above former resistance the past 2 years. That alone is impressive. If we're above 272, there is no reason to be pessimistic about Communications Stocks:

From the desk of Steve Strazza @Sstrazza

We haven't talked much about Real Estate $XLRE lately because there really hasn't been much to say. Over just about any timeframe, it's underperformed the S&P 500 $SPY, which we'll illustrate with a ratio chart below.

Price is basically unchanged over the trailing year. The only sectors that have performed worse are Industrials $XLI, Financials $XLF, and Energy $XLE. This is not a group you want to be associated with.

Looking at the chart, you'll notice it's gone nowhere for much longer than just the past year. XLRE has actually been chopping around in a messy range for the better part of four years now!

From the desk of Steve Strazza @Sstrazza.

This is the third edition of our new "Under The Hood" column. Read more about it here.

We are already getting positive feedback on this new strategy from "Mr. Market" as both of our trade ideas from last week's post are now in the top 5 of this week's most popular stocks (measured by the net increase in ownership, week-over-week).

In other words, Robinhood investors have been buying these names hand-over-fist since we wrote about them last week. They've been rewarded for it too as they've both performed very well.

Workhorse $WKHS has really lived up to its name as it hit our price target in a matter of days, and then went on to double again from there. The stock is up about 4-fold since it broke above our risk level near 5 early last week.

Here is a look at the updated chart, with the same exact annotations from last week's post.

Click chart to enlarge view...

This is the video recording of our July 1, 2020 Monthly Charts Live Strategy Session

The stocks that worked well in the second quarter should continue to lead the market higher. We still want to be buyers.

On Tuesday afternoon I had a chat with Catherine Murray over at BNN Bloomberg about which stocks we're most focused on. As it turns out, the same stocks and sectors showing up on our buy scans in early to mid-March are the same ones showing the most positive momentum and relative strength now.

It's working. We're sticking with it. Here's the interview in full: 

From the desk of Steve Strazza @Sstrazza.

What's with all this talk about weak breadth lately?

A lot of market participants have been pointing out the divergences or lower highs in popular breadth indicators such as the percent of S&P 500 stocks at new 52-week highs or the percent above their 200-day moving average.

In many cases, these actually aren't divergences at all as the S&P is yet to make a new year-to-date high itself.

Just like we look at different breadth indicators to identify market tops than the ones we look at to signal bottoms, we should use different items in our breadth toolkit depending on the market environment we're in.

Using the current rally as an example, it makes little sense to give weight to the percent of stocks making new 52-week highs considering most indexes and sectors haven't been able to achieve the same.

Although, there are other metrics like the percent of stocks making new short-term highs and the percent hitting overbought momentum readings that can give us a lot of information about market internals right now. In this post, we'll dive into these charts to see what they're...

What do we know about all-time highs? We know we don't usually see them happen in downtrends. As obvious as this might seem to some, you'd be surprised how many people don't realize that new all-time highs are a classic characteristic of uptrends.

I encourage you to go back and study the greatest uptrends of all-time. Along the way, do you see new lows being made? Or do you see a lot of new highs in those uptrends?

Well, here is the Nasdaq Composite closing at new all-time highs for the second consecutive month. I've done the work, these are things we usually find in uptrends:

It's my favorite time of the month! We have a fresh batch of Monthly Candles to analyze, help us identify trends and find profitable ideas. It takes me no more than 30-60 minutes and I only have to do this exercise once each month. That's just 12 times a year and BY FAR the most valuable 6-12 hours of work I put in each year, and it's not even close!

I'd like to invite you to join be this evening for a live Strategy Session. We'll be going through all the most important Monthly Charts and talk about what we want to do as we enter the 3rd quarter!

I will be hosting this Live Call tonight, Wednesday July 1 @ 7PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with all the other live calls since 2015.

Here are the details for tonight:

From the desk of Steve Strazza @Sstrazza

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?

From the desk of Steve Strazza @Sstrazza

For the week ended Friday, June 26, 2020:

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

"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness."

It sounds like Charles Dickens could have been writing about today's market in his famous passage from A Tale of Two Cities.

Many areas of Growth and Technology are trading at or near record highs, and it's sure felt like the "best of times" for anyone who's been overweight these stocks in recent years.

On the other hand, cyclicals and Value were already hurting coming into the year and then endured serious structural damage during the Q1 crash. If you've been invested in these areas, particularly those groups directly impacted by Covid-19, it might just seem like the "worst of times."

Navigating the volatility hasn't been easy as even emperors of Industry like Warren Buffet have made some major...

We take a consistent intermarket approach to stocks. Not only do we analyze all the Stock indexes, both domestically and around the globe, but we also compare stocks to other asset classes. This is historically very helpful information to determine the direction of the primary trend for stocks.

Today, we're taking a look at stocks running into major resistance relative to its alternatives. More specifically, stocks are failing relative to both Bonds and Gold.

As you can see in this chart, we saw significant support near this gray shaded area in late 2018 and then once again in August of last year. This "Support" finally gave way and broke in early March, almost 4 months ago. This former "Support" has now turned into "Resistance" throughout June: