First things first, thank you.

The amount of love and support you guys have shown us over the past month has been incredible.

Baby Harvey and Momma are both doing great so it’s time to get back to work.

The first show back had to be All Gas No Brakes.

20+ Charts in 20 minutes.

After being away for a few weeks, though, I didn’t want to come back and immediately start throwing a bunch of individual trades at you.

I actually did very little trading while I was out.

I mostly let the positions I already had on, and the broader market, do the work for me.

And funny enough, that was probably the biggest lesson from the entire break.

Sometimes you step away, come back a month later, look at your account and realize the market didn’t exactly need your help.

So rather than giving you a giant shopping list this weekend, I want to start one level higher.

Where should we be fishing?

Because right now, there are plenty of ponds worth throwing a line into.

The S&P 500 is making new all-time highs.

Nothing groundbreaking there.

What’s more important is what’s happening underneath the surface.

The percentage of S&P 500 stocks above their 200-day moving average is also sitting near its highs for the year.

This isn’t simply a market-cap-weighted index being dragged higher by a few giant technology companies.

The underlying stocks are participating too.

In the show I called it a bull market in the market and a bull market in the market of stocks.

The equal-weight indexes make the point even cleaner.

Take away market-cap weighting and give every S&P 500 stock the same influence.

Still at all-time highs.

The Russell 1000 equal weight, which spreads exposure across more than 90% of the U.S. equity market capitalization, is also at all-time highs.

That’s broad participation.

And I think there’s an important behavioral lesson buried in there.

Investors love believing returns come from finding the perfect stock.

We want to believe we found something nobody else saw.

Sometimes that’s true.

But when I can take a month off, barely touch anything, and come back to an account that did just fine without me, it’s a pretty good reminder that the bull market is doing a lot of the heavy lifting.

That should crush your ego a little bit.

In a good way.

You don’t always need to find the next high flyer.

Sometimes you just need to identify a healthy environment, own uptrends, manage your risk and stay out of the market’s way.

And right now, the opportunity set looks pretty broad.

The second thing that jumped out going through the market was where some of the best trends are developing.

Everyone wants to talk about technology.

I get it.

But ironically, technology is probably one of the harder areas of the market to initiate trades in right now.

Software has ripped after spending much of the year frustrating everyone, and portions of semiconductors are stuck somewhere between their intermediate and longer-term trends.

Meanwhile, some of the supposedly boring areas are just grinding higher.

Financials are a great example.

Financials didn’t have the explosive momentum that technology or semiconductors had.

They just kept going up.

The strength isn’t isolated either.

Look at $KBE ( ▲ 0.36% )  

I joked during the show that you can basically throw a rock into Financials and hit an uptrend.

That’s the type of pond I want to be fishing in.

Healthcare is another one.

Healthcare spent a long time building a base.

Then price broke out and, at the same time, momentum transitioned from a bearish RSI regime into a bullish one.

That’s the type of character change I pay attention to.

Technical analysis doesn’t need to be perfectly drawn lines or some voodoo pattern that magically predicts the future.

Price is the result of supply and demand.

When the characteristics of price change, something underneath the surface has changed too.

That’s what we’ve seen in Healthcare.

And underneath the sector, Pharmaceuticals continue to trend well.

Healthcare Providers have broken their longer-term downtrend.

Biotech continues to consolidate within an underlying uptrend.

There’s plenty to dig through.

Taking a month away from the market was good for me.

It reminded me that our job isn’t to make stocks go up.

Our job is to figure out what the market is already doing and align ourselves with it.

Right now, there are plenty of opportunities.

I ripped through more than 20 charts in this week’s All Gas No Brakes, including Energy, Technology, Software, Biotech, Materials, Financials, Healthcare, Growth versus Value, High Beta versus Low Volatility and a handful of other areas I didn’t get into here.

If you want the charts behind the argument and some homework for the weekend, give the full episode a watch.

Sometimes the hardest thing to do in a bull market is simply letting the bull market do the work.

Anyway, that’s my two cents.

🚀 Throw it on 1.5x speed and let it rip.

👍 Give it a like. It’s the easiest way to show me some love.  

The Sunday Stalk List

Tomorrow, I’ll break down more of what I’m buying in the Sunday Stalk List.

If you want clean charts, clear setups, and tactical insights, this one’s for you.

It hits your inbox every Sunday so you know exactly what to stalk for the week ahead.

Cheers,

Larry Thompson, CMT CPA

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