The trend for stocks is down. When they do rally, they scream dead-cat bounce. And bonds keep going out at new all-time highs every week. Gold is at its highest prices in 7 years and Interest rates are in free-fall along with bank stocks. What type of environment does this appear like to you? Is it the kind of market where we want to be buying stocks aggressively, or is this the type of market where we want to be smaller, cash heavy and more defensive?

Let's try to figure it out together.

First of all, Industrials historically have the highest correlation with the S&P500 of all the S&P Sectors. This is what that group currently looks like. One of our most basic technical principles is that former support turns into resistance. We call that Polarity. You can see this taking place in this sector index:

Chart Summit 2020 is officially in the books. What an amazing time we had. Wow!

The videos of all the presentations are now up and you can go to ChartSummit.com and stream them for FREE!

In our market view update, we outlined how we're approaching stocks after catching last week's 20% rally in the Nifty 50.

In this post, we want to share an intermarket signal that's suggesting a defensive posture remains best when approaching stocks as an asset class.

Last week we looked for a counter-trend rally in stocks and we got it. The Nifty 50 rallied 20% from its intra-week low to its intra-week high, leaving a lot market participants asking if Indian stocks are out of the woods.

In this post, we're outlining why our defensive stance remains and how we're approaching the weeks ahead.

There has been a lot of risk in the stock market over the past 2 months and that still has not changed. Things are getting worse, not better. I tried to emphasize in this week's Live Call that we have NOT seen any evidence to suggest that the worst of the selling is behind us.

We've been inundated with emails from Financial Advisors and traders all over the world. From New York to London, South Africa, Malaysia, Laguna Beach they keep coming in. We work really hard and it is so nice to see how much we've been able to help people, both pros and every day hard working individuals. Thank you from all of us at Allstarcharts! We don't take these notes for granted even for a second.

We know times are tough for some people right now. I have friends and family that lost their jobs today. I'm seeing it outside of markets.

This is the video recording of the March 2020 Conference Call.

Every month I host a Conference Call for members of All Star Charts Pro. From the feedback we get from our readers all over the world, this one feature of our Membership is a fan favorite.

A lot has happened in the past month. You hear things about interest rates getting slashed to zero, viruses impacting stocks all over the world and many things that none of us could have predicted a month ago. However, Technical Analysis gave us the ability to get out of the way and avoid this entire mess. Not only did we want to buy bonds, but we simultaneously wanted to sell stocks!

Today I want to share with you the video of last month's Live Conference Call. I've unlocked it so anyone can watch it, not just Premium Members. I've gotten a lot of requests to do this, even from paid subscribers, because opening it up serves as a great educational resource for the future. We can all learn from this, myself included.

We got a lower low in equities, followed by continued weakness rather than stabilization. Heavy cash positions and a defensive posture remains best in this historically volatile environment.

Given how quickly things are moving, there are three charts on our screen that will help identify when a shift in the market is occuring.

From the desk of Steve Strazza @Sstrazza

Thank you to everyone who responded to this week’s Mystery Chart.

We had a few buyers but most of you were selling at this logical level of interest or exercising patience to see how prices react here. A few responses also pointed out that this likely isn't the best time to enter on the long side but are anticipating an eventual breakout and would be buyers if and when we get it.

This is the same camp we'd fall into and we provide details why in the original Mystery Chart post. With that as our backdrop, let's look at the chart.

From the desk of Steve Strazza @Sstrazza

We look at a variety of intermarket ratios that span just about every asset class in order to get a read on interest rates. Here is one that we don't discuss too often, but its relationship with the 10-Year Yield is obvious from looking at the chart below.

The S&P High Beta/S&P Low Volatility (SPHB/SPLV) ratio made significant lows around the same time and place as the 10-Year has several times over the past decade.

This is the big question going through the minds of market participants all over the world right now. What's next? Have we seen the worst of it? Or is this just the eye of the storm?

I remember as a kid I was 10 years old when a huge storm hit Miami. Hurricane Andrew was a massive category 5 storm that was supposed to hit Orlando but in the middle of the night changed directions and decided to make a beeline towards my house. So the eye of the storm actually went over our heads:

Stocks got hit nicely this week and we did very well in our bond positions. So where do we profit next?