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

In April 2020, crude oil traded below zero and marked the perfect capitulation event for a number of trends.

Around the very same time, both commodities and stocks bottomed and kicked off major rallies.

Until recently, commodities had underperformed stocks for about a decade. To make matters worse, they were moving lower on an absolute basis for most of that time as well. 

Not only have commodities started to trend higher on an absolute basis again. They're also undergoing a reversal in their relative trend with stocks and other alternatives.

We’ve been clear about our bullish position as we’ve discussed the potential for a new commodity supercycle for over a year. 

Now, we want to take that thesis one step further as the evidence is building in favor of commodities experiencing a sustained period of outperformance relative to stocks.

To best take advantage of this trend, we want to be overweight commodities and commodity-related stocks.

From the desk of Willie Delwiche.

Key Takeaways:

• Risk pairs moving toward risk off extremes
• Risk On is weakening more than Risk Off is strengthening
• Risk indicators point to risk off environment across multiple time frames

After highlighting our Risk Off - Risk On Range-O-Meter last Friday, I want to do a deeper dive into what we are seeing from a risk perspective. A majority of our Risk Off vs Risk On asset pairs (13 of 20) have seen more strength out of the Risk Off component than the Risk On Component in recent weeks. Over the past month the average pair has dropped below the 50% threshold and is now in the bottom half of its recent range. Financial sector pairs (Broker Dealers vs S&P 500, Regional Banks vs REITs) stand out as exceptions - areas where Risk On assets are showing strength and working toward new highs).

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

The US dollar can’t catch a bid.

Since briefly reclaiming its November highs last month, it’s been nothing but down and to the right for the US Dollar Index $DXY.

Many global currencies have reacted by catching higher – especially the euro. But commodity-centric currencies – like the Canadian and Australian dollars – have had a more muted reaction. We think that’s likely to change in the coming weeks and months.

With interest rates on the rise around the world and crude oil prices pushing above 90, we think it’s just a matter of time before we begin to see some real strength from these currencies – especially if we see a sustained downtrend in the USD.

Today we’re going to highlight one of these forex pairs, as we think it’s poised for a major move. Let’s talk about the USD/CAD.

Here’s a weekly chart of the USD/CAD cross:

Music week continues here at Allstarcharts with a little R.E.M. today.

Yesterday we were wondering "What's Going On?", to quote the great Marvin Gaye.

So on today's note, we'll try to answer the question: Is this, in fact, The end of the world as we know it?

And for me, the answer is a big fat NO if these two indexes are above their 2018 highs:

No, not Santa. He already came and went.

JC came to Boulder yesterday (where I Iive) and we were able to get together to enjoy a late dinner. It was a great opportunity to reflect on how far we’ve come and what we’ve already accomplished.

All Star Charts launched about 13 years ago. And we launched All Star Options nearly four years ago.

During this time, we’ve seen big bull runs, panic-inducing corrections, and everything in between.

But the one constant has been

In yesterday's note, we outlined our macro Bitcoin/crypto thesis.

In essence, the market is leaving a considerable oversold zone driven by modestly strong spot flows by whales and institutions.

Now that momentum is back in favor of the bulls on the break of 41,000, we're beginning to deploy our elevated cash positions back into Bitcoin and a variety of trades.

In today's note, we'll discuss a few names we like monitoring for long and short positions and how we're approaching price action from a tactical perspective.

Let's begin by addressing shorter time frame developments.

Today we're taking a pick from the Consumer Durables sector. There's been a slight pick-up in activity along with a big base breakout. Which stock is it?

Let's take a look at the trade for this week!

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 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.

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 February 4, 2022. This report is published bi-weekly and rotated 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 seeing an unusual increase in investor interest.

Whenever I'm trying to figure out what's going on, I can't get that Marvin Gaye song out of my head.

But the tl;dr of it is that US large-cap stock indexes are holding support. So far, anyway.

We laid out the key levels a couple weeks back.

But also notice how we've been seeing more strength around the world, with the US acting as one of the laggards. It probably has something to do with all that growth exposure in a lot of US large-cap indexes.

Most other countries don't have that.

Here you can see the Dow Jones Composite Index holding that key 11,200 area. This is a good representation of what we're seeing in a lot of other major indexes and sectors: