I get to talk to traders and investors of all shapes and sizes every day of my life. This is something I like to do for fun, and it's also a great way to learn. But remember, I do this for a living. So not a day goes by where I'm not talking to market participants.
This has gone on for decades now. Everyone from the largest banks and hedge funds on the planet to recent grads first learning how to trade.
I have a lot of conversations with these investors. And one common theme I've heard over the past few months is just how difficult of an environment this currently is.
A lot of traders are getting chopped up in this mess of a market. And it's not anything new, it's been messy for quite some time.
From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
The bull market for commodities is alive and well. They were the top-performing asset class last year, and they’re kicking off the new year with a lead once again.
The energy-heavy CRB Index is printing new seven-year highs, and our ASC Equal-Weight Commodity Index just resolved from a nine-month base to its highest level since 2013.
To take advantage of this area of leadership, we’ve been highlighting strength and outlining long ideas in a variety of commodity markets.
We know not everyone has access to the futures markets, and that’s OK, because there are plenty of opportunities to express a bullish thesis on commodities through the equity market.
To make this easier, we’ve put together a universe of stocks that offer investors exposure to a wide array of different commodities.
When it comes to portfolio management, asset allocation matters. For many the starting point of this discussion of dividing assets between stocks and bonds. This leads to the often talked about 60/40 portfolio: 60% stocks and 40% bonds. From my perspective that is an incomplete opportunity set and decisions based on such an opportunity set are going to leave investors feeling underwhelmed. Stocks (VTI) and bonds (AGG) are important components, but commodities (DBC) and cash (MINT) need to be on the table as well. Commodities were the top performing asset class last year. Amid equity market weakness this week, commodities are moving to new highs (assets in up-trends tend to do that). Cash has been mocked recently as a guaranteed way to lose ground relative to inflation. That might be a small price to pay for the flexibility it can provide in the face of volatility elsewhere. Three consecutive years of 20%+ returns for equities can make investors financially and emotionally over-invested in stocks. Maybe it’s time to get back to the basics. Stocks. Bonds. Commodities. Cash.
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.
Tuesday night we held our January Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.
The number crunchers are reporting that workers have gone missing. Plenty of jobs are available. But no one is showing up to fill the open positions.
They are calling this phenomenon the Great Resignation.
It makes sense if you’re looking at the situation through the lens of the established system. Folks are dropping out, which means they must be giving up. If they wanted to work, they would work.
But what if people aren't so much opting out of one system, but actually opting into a different one?
We're putting on an $SMH March 265/270/320/325 Iron Condor for an approximately $2.15 credit.
This means we’re short the 270 puts and 320 calls, while protecting our position $5 away on both sides with long 265 puts and long 325 calls. We’ll be doing the same number of contracts at all four strikes to keep the risk even.
Check out our short video with the thought process behind these trades:
