My Cheat Code Chart

One of the best ways to read the market is by watching where money is moving.

Capital flows tell you who’s leaning in, who’s sitting back, and how much risk investors are willing to take.

A favorite tool I use for this is the Consumer Discretionary vs. Consumer Staples ratio

Historically, when this ratio points higher, it signals an environment where market participants are rewarded for buying stocks, not shorting them.

And right now, it is breaking out to its highest level ever.

So whenever you doubt, look at this chart.

New highs like these are exactly the kind of evidence that suggests we should be focusing on stocks to buy, not stocks to sell.

It’s been working pretty well so far. And as long as it holds, the path of least resistance remains higher — giving the bull market plenty of fuel into the year-end.

Of course, a more "cautious" scenario exists if the breakout fails and the ratio drifts back into its old range.

But for now, everything points to a market environment that rewards those leaning into risk.

Steve and Mary are hosting a live Chart Fest to walk you through the setups we at ASC are watching right now.

It’s Thursday at 4:15 p.m. Eastern.

Seats are free — reserve yours now.

Alfonso De Pablos

Senior Analyst, All Star Charts