“This is a narrowly-led mega cap bull market.”

I can’t tell you how many times I heard myself saying those words at some point over the last couple years. I’ve repeated it so many times that I just assumed it has continued.

A consistent imperfect routine is way better than an inconsistent perfect routine.

When I've worked with investors that are new to technical analysis, I often find that they spend too much time trying to perfect their analytical approach on a particular chart, and way too little time determining which chart they should be looking at in the first place!

My broad market analytical approach is comprised of three main steps: Price, Breadth and Sentiment.

First off is price. If you ask me what chart I would look at to get a read on the S&P 500 index, my answer would be a chart of the price of the S&P 500 index! Price is king.

Today’s One Chart is The Walt Disney Company (DIS). It’s an interesting chart because of the earnings beat this week and what that means for long-term potential appreciation, but also because it illustrates the concept of follow-through, or confirmation.

Last week on The Final Bar, one of our Mailbag questions related to Amazon.com (AMZN) and how far it has reached above its 200-day moving average. This phenomenon speaks to the long-term strength of AMZN’s price movements, the short-term overreaching of the price since the March market low and the high likelihood of further upside for the stock.

Today’s chart is the Nasdaq 100 index, and the focus is on bearish divergences. A bearish divergence is when you have higher highs in price and lower peaks in momentum, in this case in the form of RSI.

The essence of market breadth is to see how the stocks that comprise a benchmark are performing relative to the benchmark itself.

I've often said that by looking at individual stocks, you can get a deeper level of understanding of what's moving the overall equity markets.

In case you’ve missed it, we have recently found ourselves in a bear market environment.

The first quote I want to share with you about this market environment is,

“Bull markets are great, but they breed complacency. Bear markets can be energizing. Instead of fretting over the decline in your net worth think opportunistically about all of those bargains and the potential gains when inevitably a bull market returns.” – James B. Stewart

I wanted to share with you a quote from Jesse Livermore, which says “there is only one side of the market and it is not the bull side or the bear side, but the right side”.