Two themes stand out as I review the charts this week. First, the leadership of the supersized MANIA names that seem to dwarf everything else. Second, charts in the Financials sector that have been notable underperformers over the last six weeks. Let's review both of themes and let the charts tell the story.
"Amazon makes no sense," begins a recent article trying to grasp the impact of this one company on so many other companies and industries. As Bloomberg points out, "Executives at the biggest U.S. companies mentioned Amazon thousands of times during investor calls last year, according to transcripts—more than President Trump and almost as often as taxes."
A sideways, or range-bound, market represents an equilibrium between buyers and sellers. I wrote a piece over at seeitmarket.com recently about the S&P 500 settling into a price range between its 50-day moving average (a common short-term trend indicator) and its 200-day moving average (a good long-term trend indicator).
I was very interested to see the folks at Visual Capitalist run a piece on big media stocks and how the industry has evolved. Their main infographic illustrated the relationship between the largest media names, with an emphasis on the impact of key mergers in the works such as between Disney and 21st Century Fox.
Being a mindful investor means you learn from the past, focus on the present, and plan for the future. One way to learn from the past is to review the top and bottom performing stocks over a certain time period and think about what you got right and what you may have missed.
There is no doubt that automation and AI will continue to impact the financial industry in the coming years. But as I read about Wells Fargo using AI to rate stocks, three things came to mind that bring to light the benefits and the challenges of automating the research process...