From the desk of Steve Strazza @Sstrazza

Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for five to nine years.

We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money.” Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

From the desk of Steve Strazza @Sstrazza

Crude oil is at its highest level since 2014 after it took out resistance around 76. 

Energy stocks just ripped off of support and are back above a key level of resistance, trading at highs not seen since early 2020.

Economically sensitive commodities and cyclical stocks, in general, remain very well bid. 

Meanwhile, the mainstream media is hung up on narratives surrounding stagflation and the possibility of a global recession. But we’re just not seeing this at all when we look at price. 

Risk assets are performing as well as they have all year. And, when we look outside the US, while there’s definitely been selling pressure around the world, the areas that stick out all seem to have something in common.

The energy-dependent countries are showing leadership. 

This supports the recent price action from energy futures and stocks, many of which have been ripping to fresh highs.

In today’s post, we'll take a look at some international equities we can use to express a bullish thesis on higher oil prices -- and higher prices for risk assets more broadly.

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

All eyes have been on the US dollar as it presses to new 52-week highs.

But its recent rally hasn’t been accompanied by the usual risk-off behavior we’d expect. Actually, it’s been quite the opposite.

Bonds have been rolling over, commodities and cyclical stocks continue to march higher, and the yen can’t catch a bid.

To us, the evidence suggests the USD is momentarily decoupling from its classic intermarket relationships as it grinds higher in the face of all this.

If the US dollar is out of sync with the action in other asset classes, where can we look within the currencies market for a clear perspective of investors’ attitudes toward risk?

That’s right... the yen!

Let’s look at a couple of charts highlighting the Japanese yen’s weakness and discuss what it means for the current market environment.

First up is the classic risk-appetite barometer, the AUD/JPY cross:

This is our ASC Research Q4 2021 Playbook.

With the current market environment giving us many mixed messages, what better time to dive in and see what's happening underneath the surface?

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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.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest “Minor Leaguers” report.

We’ve already had some great trades come out of this small-cap-focused column since we launched it late last year and started rotating it with our flagship bottom-up scan, “Under The Hood.”

We recently decided to expand our universe to include some mid-caps…

For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but we think it’s time we branch out a bit and allow some new stocks to find their way onto our list.

The way we’re doing this is simple…

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 Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 100 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft -- with market caps in excess of $2T -- to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It’s got all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we’re developing a separate universe for that, and we’ll be sharing it with you soon.

So, The Hall of Famers is easy.

We simply take our list of 100 names and then apply our technical filters in a way that the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here's this week's list:

And here’s how we arrived at it:

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

Commodities have been on an absolute tear, with our Equal-Weight Commodity Index up almost 40% over the trailing year. 

But ever since Q2, the vast majority of the space has been chopping sideways along with most cyclical assets. 

Sounds a lot like stocks, doesn’t it? And while we’re still yet to see any major resolutions from equities, we have seen some bullish developments in the commodities market of late.

Energy asserted itself as the new leadership group with a series of major breakouts. Both crude and heating oil broke to new six-year highs, while gasoline futures completed a seven-year base. 

Then there’s natural gas, which gained more than 25% during the trailing month and tested its 2014 highs just above 6.

The emerging leadership from energy comes as no surprise, as we noticed signs of relative strength last month.  

Now that it’s here, what are the implications for the rest of the commodity space and global risk assets?

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

Back in August, we presented two opposing views of the relationship between stocks and bonds.

The question was, after running into resistance at a key extension level, in which direction would the $SPY/$TLT ratio resolve?

Would stocks break higher relative to bonds, in the direction of the underlying trend?

Or would the ratio roll over in favor of bonds? It would certainly be a logical level for a trend reversal...

Fast forward two months, and we finally have our answer.

Turns out it was the former -- stocks are breaking higher relative to bonds. Here's a look:

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

Using the S&P 500 as your investment proxy, you’re probably happy with your returns so far this year.

That's even with the 5% pullback we finally saw last week -- the first 5% pullback for the S&P 500 in 2021, and it took 229 trading days.

But the averages aren’t telling the whole story. Some stocks are going up, but most are not. We've been pounding the table about this for months already, and it's been the main theme during the first three quarters of the year.

Unless you’ve been living under a rock, you already know the current environment is an absolute mess, as the weight of the evidence continues to hang in the balance.

In this post, we’ll show you why the S&P 500 is not the stock market and the stock market is not the S&P 500. 

When we analyze equities as a “market of stocks” rather than “a stock market,” it becomes clear that we're in the thick of a correction that started as early as Q1.  

Here at All Star Charts, we like to call this a stealth correction!

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

The US dollar marches to the beat of its own drum.

Interest rates are rising across the curve, sparking strength out of economically sensitive areas within stocks and commodities.

Crude oil and the energy-heavy CRB Index are breaking to new six-year highs and the energy sector SPDR is testing a crucial area of former support turned resistance -- all while the US Dollar Index is catching a bid. 

It’s not every day we see the dollar and commodities rally in tandem.

This environment suggests the dollar should be rolling over or chopping sideways at best. Yet it continues to show strength!

When markets don’t do "what they should,” that’s valuable information. And in this case, it raises some important questions.

How often does the historically inverse correlation between the dollar and commodities decouple?