From the desk of Steve Strazza @Sstrazza

The US Dollar Index $DXY is ripping to its highest level in 20 years today.

We just covered this dollar strength and what it means in our Currency Report, which you can read here.

We talk about the implications of a stronger dollar on risk assets, particularly stocks.

While this rally in the dollar is definitely not a good thing for stocks in the US or abroad, we see these intermarket relationships dislocate all the time.

Could stocks and the dollar rally higher together? Sure! Commodities and the dollar have already been doing this for several quarters now...

Let's talk about that quick.

From the desk of Willie Delwiche.

I had a great time in DC last week, first for some dedicated time with the All Star Charts team that is normally dispersed all over the world, and later at the CMT Symposium itself. There was good food and drink and great conversations – in larger settings and small. 

As great as the presentations were overall, I often found myself chewing on asides and tidbits more than the large macro points. For me, the key insights were more about process and less about conclusions. Maybe that’s not surprising. Conclusions come and go based on market conditions. But process and approach should be consistent (though not immune from the refiner’s fire). I think Tyler Wood said it best last week, “We’re not predicting the future, just reacting responsibly.”

Things I picked up last week that I want to hold on to:

The most significant insider transaction on today's Hot List is a Form 4 filing by the president and chairman of Warner Bros Discovery $WBD.

We couldn't help but notice the relentless bid in Bitcoin $BTC yesterday morning while equities had a flat start. Leading up to the FOMC announcement, Bitcoin front-ran the rally in US equities.

The two have been heavily correlated in recent months; evaluating the co-movement between the two is proving to be an insightful data point for stock and crypto investors alike.

We're doing something a little bit different today.

I'm thrilled to welcome my friend Justin Paterno, Portfolio Manager of the new OSPREY NFT Fund.

Whenever I have questions about NFTs, Justin is the one I turn to. In fact, a lot of my friends go to Justin with questions about NFTs.

So in this episode, I chat with Justin about all things NFTs, different "sectors" of NFTs, the future of NFTs, the price analysis aspects of NFTs and Web 3.0, and all the things that come along with those, good or bad.

I personally own a bunch of NFTs, and I have a funny feeling I will own a lot more in the coming decades. Therefore, it's probably a good idea that we get a better understanding of them.

This was a lot of fun and a nice break from all the other asset classes that we're always talking about.

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. Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report. We'll publish this column...

From the desk of Steve Strazza @Sstrazza

We held our May Monthly Strategy Session on Tuesday. ASC Premium Members can click here to access the recording and the chartbook.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends.

This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

From the desk of Willie Delwiche.

Key Takeaway: At last week’s CMT Symposium, the lack of bulls and high number of bears on the AAII survey was probably the most oft-cited single statistic by the symposium speakers. This week’s data confirms that pessimism. II bears reached their third highest level in the past decade and put/call ratios haven’t been as high as they are now since the COVID crash. Beneath the surface, however, there is evidence that investors haven’t actually thrown in the towel. The AAII Asset Allocation survey for April shows that while they said they were bearish last month, individual investors were actually increasing equity exposure. The spike in the put/call ratios meanwhile has more to do with collapsing call volume than surging activity in puts. Bearish sentiment extremes are difficult to identify in real-time, that’s why it’s typically best to go with the crowd until it has reversed. 

Sentiment Report Chart of the Week:  What They Do > What They Say

The 4-week average of Bulls on the...

It's no secret the oil and energy sectors have been outperforming in 2022.

Of course, when a trend like that is no secret, it tends to become a crowded trade. And we've seen a taste of the ramifications of that in recent weeks. There were some vicious pullbacks in all the biggest winners about two weeks ago.

Fast forward to today, and the smoke has cleared a bit. Many of these names survived the exits of hot money and are now showing signs of resuming their prior uptrends.

At the top of this list right now is Exxon Mobil $XOM.

The CEO, chairman, president, and three directors of B. Riley Financial Inc $RILY filed Form 4s revealing purchases of their own stock.

Of the six insiders, the largest splash was made by chairman and CEO Bryant Riley himself. He reported purchasing over $10 million worth of shares.

Whenever we see this many insiders buying at the same time, we want to pay close attention.

What do they know?

This is the video recording of our May 3rd Monthly Charts Live Strategy Session