From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

The best opportunities are the ones with the most clearly defined risk characteristics and most favorable risk/rewards.  

This summer, Minneapolis Spring Wheat was offering us a trade set-up with both these qualities. Price had just resolved higher from a near decade-long base and was trading at its highest level in 8 years. We were buying the breakout.

Fast forward to today and our initial profit target has been met and we’re locking in gains.

In today’s post, we’ll take a step back, review our trade, pinpoint current levels of interest, and discuss how we’re managing the position moving forward.

First, let’s look at the weekly chart of Minneapolis Wheat futures:

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

The outperformance from commodities this year has been hard to ignore.

Over the trailing 52 weeks, the CRB index is up over 56% and our equal-weight commodity index is up over 37%. The entire space has been participating -- energy, base metals, grains, and softs. 

And even though precious metals have been trending lower since last summer, we can’t forget that gold kicked off the commodities rally by hitting new all-time highs last year.

If we’re only looking at stocks and bonds we’re cutting ourselves off from what is currently the top-performing asset class. It doesn’t matter whether we trade the markets on a more tactical timeframe or if we have a long-term investing approach. There is alpha in commodities right now and we want to have exposure. 

But how do we take advantage of this space if we don’t have the ability to buy December futures contracts of Crude Oil or the March ‘22 futures contracts of Corn?

That's where our commodity ETF/ETN list comes into play. 

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Last week, we pointed out some mixed signals in our breadth indicators. 

Despite the new highs from almost all the large-cap major averages, we had yet to see new highs in their corresponding advance-decline lines.

We also hadn’t experienced the kind of expansion in participation that we’d expect to accompany the indexes to new price highs.

Our new high indicators were still muted, even on shorter timeframes.

But that was last week. This week, mid-caps and small-caps have joined their large-cap peers at new record highs after making decisive upside resolutions from their year-to-date ranges.

And guess what? We’re finally getting that breadth confirmation we were missing.

Let’s talk about it.

First, here’s a quick update on the advance-decline lines that we covered in last week's column:

From the desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as a market of stocks.

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions... but there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club. We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports. But we don’t highlight lagging stocks on a recurring basis.

Until now… 

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

We’ve been pounding the table about rising rates for over a month now.

It’s hard not to when they're rising across the curve in both the US and abroad. Cyclical and value-oriented assets have increased in tandem, as energy and financials have become leadership groups.

We continue to see countries with heavy exposure to financials emerging from multi-decade bases. Just last month, the Euro Stoxx 600 made new all-time closing highs, while Italian equities reached their highest levels in 13 years.

But when we look further out on the curve, the long end hasn’t been keeping pace with shorter duration yields in recent weeks. 

Taking a look at the 30-year beside the 10- and 5-year yields tells this story best.

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

Risk assets are on the rise.

Energy futures are resolving higher from multi-year bases. Stocks are pressing to new highs all along the cap scale. And the more cyclical, value-oriented markets are catching a bid and becoming leadership groups again -- think financials and energy.

It appears everything is falling into place. But a few pieces are still missing… 

For instance, you might assume the US dollar is under pressure as commodities and stocks outperform.

But it’s not. 

In fact, the dollar made new 52-week highs not long ago and has since consolidated at the top of its range while riskier areas of the currency market have struggled to catch a bid.

We’ve highlighted the US Dollar Index and the mixed signals coming from developed currencies in recent posts.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood" column where we'll cover all the action for the week ended October 29, 2021. This report is published bi-weekly and rotated on-and-off with our "Minor Leaguers" column.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

This is the video recording of our November 1, 2021 Monthly Charts Live Strategy Session

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow The Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Monday November 1st @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday evening:

It's Saturday Morning Chartoons time. 

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley      

Procyclical commodities have attracted all the attention this year as inflation and rising rates have driven prices considerably higher.

But, as we pointed out last week, many of these contracts -- Brent crude, natural gas, copper -- are running into areas of overhead supply or are already in the process of correcting.

With that as our backdrop, let’s switch gears and focus on an area of the commodity space we haven’t talked about in months.

That’s right... precious metals!

While we’re seeing many leading commodities pause at logical levels of resistance, gold and silver have finally stopped going down and are rebounding off support. Despite trending lower since last summer, they're still holding above the lower bounds of their trading ranges. We think this basket of shiny rocks is ripe for review.

Let’s take a look around the precious metals complex and see what’s new.

First, we have a chart of gold futures: