We held our March Monthly Strategy Session last Tuesday. Premium Members can click here to review the video recording and download the slide deck.
Non-members can see some highlights from the call 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.
Metals have been gaining more strength with every passing day and have certainly been outperforming the market at present. We have a long setup from the Metals sector this time around as well.
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.
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.
We've taken shots at small long trades in a few altcoins during this time, only for us to ultimately get chopped up days after putting the positions on.
This is information.
Crypto as an asset class is range-bound at best, and unless you're incorporating a staking/yield/options strategy, the vast majority of crypto traders have been better off positioned in stables on the sidelines.
The macro environment continues to be heavily driven by geopolitical volatility and the situation in Eastern Europe.
Parabolic commodity prices are beginning to take their toll on the broad market indexes, which Bitcoin and crypto have been correlated with in recent months and quarters.
Moreover, whales and savvy traders are still in the process of selling.
In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Is This The Beginning Or The End?
Not only did commodities have their best week in more than fifty years, but Copper and Gold broke to new highs – Copper to new all-time highs and Gold to fresh 52-week highs. And similar to the bullish momentum thrust in the BCOM index, when we zoom out on these charts we get the sense we’re at the beginning of a major trend -- not the end of one. Both Copper and Gold are just beginning to break out of decade-long bases. The last time they broke out of similar basing patterns these metals, and commodities as a whole rallied for almost a decade. If these breakouts are valid and we continue to see broad strength among commodity contracts, these raw materials could provide monster returns for years to come.
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.
Warren Buffett is making his first appearance on The Hot List, as Berkshire Hathaway $BRK.A purchased more than 90,000,000 shares of Occidental Petroleum $OXY last week.
OXY explores for and produces crude oil and natural gas. It’s actually the largest producer of natural gas liquids in the United States.
Especially American ones with a ton of Growth exposure!
Want to know what a bag holder looks like? I encourage you to take a look at your typical American portfolio with a ton of Technology stocks in it, Consumer Discretionary stocks and virtually no exposure to Commodities and Latin American equities.
Of course sentiment is bad. It should be bad!
But this bad?
More Bearish Financial Advisors than Bullish ones?
