Finding Strength In A Sideways Market (w/ Tom Bruni)

TL;DR

Tom Bruni analyzes market volatility and technical indicators to recommend a long position in insurance stocks.

Transcript

JUSTINE UNDERHILL: Welcome to Real Vision's Trade Ideas. Today, we're sitting down with Tom Bruni of allstarcharts.com. Great to have you back. TOM BRUNI: Thanks, Justine. It's good to be here. JUSTINE UNDERHILL: So, there's been a lot of market volatility since you were last here. What's your outlook on equities? TOM BRUNI: Yeah, sure. So, I'm a... Read More

Key Insights

• 🖤 Mixed signals in risk-on indicators and lack of price confirmation make it challenging to take new long or short positions in the market.
• 🖤 Majority of markets globally are below their 2018 highs, indicating a lack of uptrend.
• 🫰 Bearish momentum divergence on the Dow and other indexes suggests increased selling pressure.
• 😐 Bruni recommends a market-neutral trade on insurance stocks, as the sector shows signs of a trend reversal, with a target of 0.265 over the next year.

Questions & Answers

Q: How does Tom Bruni approach his market analysis?

Bruni uses a top-down approach, starting with asset classes and drilling down into each one based on their biases.

Q: What are some of the technical indicators Bruni looks at?

Bruni focuses on the number of stocks above their 2018 highs globally and the Dow 30 index level. He also keeps an eye on RSI and other momentum indicators.

Q: What does bearish momentum divergence indicate?

Bearish momentum divergence occurs when price makes a new high, but momentum, measured by RSI, makes a lower high. It suggests a shift in buyer aggressiveness and potential control by sellers.

Q: Which sector does Bruni recommend for a market-neutral trade?

Bruni suggests the insurance sector relative to the S&P 500, specifically the iShares US Insurance ETF (IAK), as a long position.

Summary & Key Takeaways

• Tom Bruni discusses the market volatility and mixed signals in risk-on indicators, leading to difficulty in finding new long or short positions.

• He emphasizes the importance of looking at the number of stocks below their 2018 highs, indicating a lack of uptrend in the market.

• Bruni explains the concept of bearish momentum divergence and its implications for market direction.