In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
A Warning From Banks
With risk-seeking behavior increasing, Financials and banks are lagging behind and not participating to the upside in a way we’d expect. The chart below is an equal-weight representation of the six largest banks in the US. This index can act as a leading indicator for financials more broadly. The fact that the index has not been able to hold the 2007 highs in an environment where rates are rising globally is a concern. Throughout history, you don’t tend to see bull markets without financials. These are the largest and most important financial institutions in the world. Bulls want to see them carve out a bottom here and catch higher along with other cyclical stocks. It should happen soon if it’s going to.
*Steve Strazza wants you all to know that HE came up with this title ;)
I have to be honest, its been hard looking for spots to put more bullish exposure on. Many stocks we like have already had significant bullish runs over the past three weeks. Buying some of these names here would feel like I'm asking to get smacked in the face by a long overdue pullback.
The commodity space is no exception. But we've found a name that looks like its just setting up for a fresh breakout so let's get right to it.
Key Takeaway: Q1 returns reflect a bifurcated market. Weekly data shows breadth struggling for traction. Inflation-fighting proposals are political palliatives, not economic solutions.
The big news of the day is centered around an SEC filing by the wealthiest man in the world.
This morning, Elon Musk disclosed a 9.2% ownership stake in Twitter $TWTR in a 13G filing. Musk has amassed roughly 73.5 million shares for a value of almost $3 billion.
According to the filing, Musk has been buying since the middle of March.
How do you get to a place where you can immerse yourself in “the Zone” to think deeply about trades, strategies, strategizing, or new ways to approach risk management?
For me, far and away the best way to enter this zone is to go for a long walk – preferably in the mountains or in a forest. Just me, maybe my dog, and the sound of the wind whispering in the trees.
On Wednesday night, I returned from four days in the Redwoods National & State Parks of Northern California. Me and a friend hiked nearly 35 miles total.
I cannot begin to describe how amazingly beautiful this corner of the world is. It was my first time there. I took some pictures and videos, but it does not do it justice. You just cannot feel it the way you do when you’re standing amongst those towering Redwood trees and the deafening silence of the endless foggy forest washes over you.
Today we sit down and chat with Professional Trader Kimmy Sokoloff.
I'm lucky to have known Kimmy for well over a decade, and we hit it off from the start.
Kimmy went through the CMT program in the 90s. And funny enough, volunteered later on with the CMT Association to grade Level 3 exams, which are mostly essays. We joke that she most likely graded mine in 2007-2008.
While I like to look out weeks and months for my timeframes, Kimmy focuses specifically on the hours and days. A 2 week trade for her is "Long-term".
We're both trained in similar ways, as CMT Charter holders. But our experiences are different.
Kimmy spent most of her career in Institutional Sales and Trading. She spent decades on the phones all day with huge funds.
So when Kimmy has something to say, we want to listen. I hope you enjoy this as much as I did.
The CRB Index is up 27.03% year to date while the S&P 500 and the 30-year Treasury bond aren’t even in the ballpark, posting lackluster performances of negative 4.95% and negative 6.25%, respectively.
Commodities are really the only game in town these days.
With that as our backdrop, we want to continue focusing on this asset class for buying opportunities.
As many of these contracts consolidate or correct following explosive upside moves, we’re paying extra attention to those that have been basing in recent months – such as natural gas.
Let’s take a look.
Here’s a zoomed-out weekly chart of natural gas futures:
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It’s got all the big names and more--but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let’s dive in and take a look at some of the most important stocks from around the world.
