From the desk of Willie Delwiche.

We sold commodities and bought bonds while tweaking where we get our equity exposure.

The Details: While none of the major asset classes are in up-trends, bonds now hold a relative advantage over stocks and commodities. We adjusted the exposure in the Strategic, Cyclical and Tactical portfolios to reflect these shifts and also to reflect leadership shifts we have seen within equities.

From the Desk of Kimmy Sokoloff

That was a nice reversal for the indices today.

They held support where they needed to and then trended higher.

From the desk of Willie Delwiche.

Calling Baloney On Investor Bearishness

Investor surveys indicate widespread pessimism but asset allocation data (and ETF flows) paint a different picture. 

The Numbers: September saw the 5th and 6th times in history that the AAII weekly sentiment survey showed bears above 60%. When bears have growled in the past, exposure to stocks was in the 40s and exposure to cash was only slightly lower. Now, equity exposure is still in the 60s (and above the long-term average) and cash exposure is in the 20s.

Why It Matters: Sentiment extremes can be valuable contrarian indicators, but this can’t work as well if sentiment is divorced from positioning. If cash has not been accumulated as investors turn bearish, there is little to put to work when the crowd’s mood turns more hopeful.

In this week’s Sentiment Report we see plenty of evidence that investors are feeling pessimistic. We could be more constructive if those feelings had already been accompanied by...

Even though stocks have broadly advanced on the first two trading days of October and Q4, today's market action reminds players that stocks are still risky here and the options market continues to price in this fear in the form of higher than normal options premiums.

As such, the odds favor net premium sellers in these conditions -- so that's what we're on the hunt for.

Ideal setups are ones in which a nearby support level has revealed itself so we can lean against it for risk management purposes.

One such setup can be found in Brookfield Asset Management, $BAM:

There's been no denying the importance of the US dollar when it comes to evaluating risk appetite.

It's been clear -- the dollar has been the safe haven.

Not gold.

Not the yen.

Certainly not bonds.

When the dollar has been strong, crypto and equities have been pressured, and vice versa when the dollar's eased off.

Just look at the last few sessions of trading: The dollar sold off, and equities quickly got back above their June lows, putting in a failed breakdown.

In fact, it's not just the broad indices putting in these failed moves. There are ton of whipsaws out there this week.

One, in particular, that's caught our interest is gold.

After running the stops below this support level, gold finds itself back in the high time frame range.

We can't say it enough: We love these setups. They're among the highest-conviction, highest-probability, and greatest momentum setups to trade -- all factors traders dream of.

In essence, when price undercuts its former lows, stop-losses get hit and...

We've adjusted a position in the Paid-to-Play portfolio today:

Stocks have been under pressure consistently since Q1 last year. That was 20 months ago.

That's precisely when the United States Dollar stopped falling and started to rise.

And this wasn't just against the Euro, which represents 58% of the Dollar Index, we saw Dollar strength across currencies from all over the world.

The US Dollar was the only safe haven asset this year. It wasn't US Treasury Bonds, it wasn't Japanese Yen and it certainly was not Gold.

The only safe haven was the US Dollar.

From the Desk of Kimmy Sokoloff

We're seeing a nice pullback in the indices this morning, which is actually healthy after the two-day rally we just had.

For today, I'm watching $SPY support at 372 and $QQQ support at 277.

Elon Musk and Twitter $TWTR are back in business!

In a letter filed with the SEC on Tuesday, the eccentric billionaire offered to close the originally agreed upon deal worth $44 billion.

The stock we're looking at this week is part of the Chemicals sector. These are stocks that are displaying strength on an absolute and relative basis. And that's exactly what we're looking for!

We retired our "Five Bull Market Barometers" in 2020 to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

From the Desk of Ian Culley @IanCulley

The US dollar has been under pressure for the past five days, and investors are dancing in the streets.    

I get it. A weaker dollar sits at the top of every stock market bull’s wish list. When the dollar goes down, stocks tend to go up. But don’t forget – betting against the dollar has only brought pain this year.

So, instead of joining the celebrations, I nailed down a clear-cut strategy for selling dollar weakness. 

Spoiler Alert: Early sell signals are already starting to fire!