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

We held our October Monthly Strategy Session last night. Premium Members can access and rewatch it here.

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 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...

From the desk of Willie Delwiche.

My favorite Head & Shoulders Patterns are the ones that aren't that at all.

Markets trend. We know that for a fact. That's why Technical Analysis works. Because as Technicians, we're identifying primary trends.

And since we know that market returns do not fall under a normal distribution, and in fact, prices actually trend, it gives us a huge advantage over those who purposely choose to ignore price.

Funny how people like to ignore the only thing that actually pays anybody.

I always thought that was so strange.

Anyway, in today's example of "Not a Head & Shoulders Top", we take a look at Copper Prices. If you have any exposure whatsoever in the market, stocks, bonds or otherwise, then this is a resolution that will interest you and most certainly impact the value of your portfolio.

Before you put on your first trade or buy any asset, there's one question every investor needs to ask themselves:

What's my objective?

For most investors, the answer is pretty simple. It comes down to maximizing returns and minimizing losses in a way that fits within each individual's unique preferences.

Despite this, you'd be surprised with the number of people who use the market as an outlet to express their political views rather than as a way to make money.

We're raising this today as a reminder to stay objective and always follow the money flow, rather than the opinion of journalists or analysts.

One field that crypto investors are particularly susceptible to these biases is within the decentralized finance sector.

DeFi is the darling of the crypto world.

If you bring up crypto to anyone in the financial realm, DeFi is front and center in the discussion. Knowing all the flaws and inefficiencies of the traditional industry, it could certainly help pave the way for a new financial system. I encourage you to go...

This is the video recording of our October 4, 2021 Monthly Charts Live Strategy Session

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

• This week, we saw a resumption of weakness in our macro universe, as 70% of our list closed lower, with a median return of -0.70%.
• The Volatility Index $VIX was the big winner, closing out the week up more than 19% and registering a fresh 13-week high in the process.
• The biggest loser this week was the Nasdaq 100 $QQQ, with a loss of -3.52%.
• We saw a 17% drop in the percentage of assets on our list within 5% of their 52-week highs...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Last week we had a major development for risk assets as the US 10-year and US 5-year yields made decisive moves higher from their recent consolidations. Now this week, we have another significant resolution to talk about… Crude Oil just blasted through its 2018 highs around 76. This is all a part of the reflation, global growth, and reopening trade. The fact that oil was able to do this in the face of a rising dollar only makes it more bullish in our opinion. It’s also worth noting that Energy stocks and other energy futures besides crude are much more supportive of this price action than they were when crude last tested this level back in July. At that time, futures weren’t confirming and energy stocks had already rolled over after peaking in June. This time around, things look much different. We think the breakout sticks, but we need to see some follow-through from price to confirm it in the...

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 back to our latest "Under The Hood" column, where we'll cover all the action for the week ended October 1, 2021. 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 that are seeing an unusual increase in investor interest.

Watch this video for a "behind the scenes" look at our process.

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If one were to simply observe the daily charts for $SPY or $QQQ while listening to the teevee, one would easily conclude the sky is falling. And that would be an easy conclusion to come to.

But when we take a step back from the noise and look elsewhere, the details under the hood are suggesting a different story. And that is giving me some confidence to fade the hysteria here.