Howard Lindzon and Ivaylo Ivanov were back again this week with some awesome charts. But before we get started, I’d like to point out a bit of sentiment that is shared, and one that I tend to agree with:
“Market breadth hasn’t been so good in years. We see strength in so many different sectors and countries – solar, biotech, enterprise software, semiconductors, gold, palladium, Brazil. Even Chinese names have started to break out and hold their gains. It’s hard not to be bullish in this market environment.”
One of the first charts that Ivanoff brings up is Gold (GLD). He points out that Gold usually spikes in times of turmoil, but that we are also seeing the US Dollar stay afloat, so it is interesting to see this metal in an uptrend lately. And we have also seen many individual Gold Miner charts with great setups lately. I think the key to any long(er) term outperformance is a breakout above the $130-132 area.Howard also mentions a few country-specific ETFs, namely Brazil (EWZ). Ivanoff agrees that this area looks the more intriguing.One individual chart that is mentioned is StoneCo (STNE). This is a fairly young name, and one that Warren Buffett has invested in.A second Brazilian chart that is shown is MercadoLibre (MELI), which is the Latin American version of eBay (EBAY). We are seeing a very solid consolidation here above $290/share, and I think if we can get through $380/share, it’s a sign that this stock may be ready for another leg upwards. Howard think this is a great way to “bet on the Internet” in Latin America.Here in the US, one area that Howard mentions is Semiconductors (SMH). While many thought that this sub-industry was useless after Nvidia (NVDA) was “wiped out”, that may not be the case. A close above $113 on this ETF would be a great sign for continued strength. Further, Howard says that the December lows and the sale of F.A.A.N.G. assets, as well as Nvidia, could be a major one of the “biggest head-fakes of all time”. He also loves the area because of the fundamental futures of industries like Machine Learning and Biotech. And on a long-term basis, we are essentially consolidating after a major, 20-year base. As long as we are above the highs from highs from 2000, I think it’s a great place to be and a positive sign for the broad market.One really good point that is made is that while the Nasdaq (QQQ) isn’t even close to reach its previous all-time highs, this is very misleading as to what is going on under the surface. One reason for this is the fact that Amazon (AMZN) has been lagging over the past few weeks. In fact, a few of the F.A.A.N.G. constituents are still 20-30% off their highs. However, regarding the index as a whole, it is a good sign to see QQQ above $170/share. One of topics Howard said he spent much of the weekend talking about (at Chart Summit! Yeah!) was actually interest rates. He says that rates have backed off, and evidences 20+ Year Treasury Bonds (TLT). This statement makes sense, as we have seen TLT rally hard, starting back in November. Ivanoff then goes on to mention that Software (PXJ) continues to be a strong spot in the market. This seems to be correct, as we are very close to making new all-time highs.So, what individual charts should we be looking at here? One could be Salesforce (CRM):Or maybe Zscaler (ZS):Solar (TAN) has is also an area that is showing strength lately:Howard and Ivanoff are both bullish on stocks, as Ivanoff points out that he can’t remember the last time we saw such good breadth in the market. Howard adds that “The money that came out of F.A.A.N.G. didn’t leave…it went to other places.” He also points out that we are seeing “risk-on” sentiment in Bitcoin, Latin America, Semiconductors, and Biotech. They do bring to our attention that the 2800 level on the S&P 500 ($280 on SPY) would make sense for a “pause” as there isn’t a lot of negative news out there right now.