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

Not unlike the major US equity indexes, the commodity space is still range-bound as we head into year-end.

When we compare the trailing 12-month returns of individual groups, we get a sense of how bifurcated the commodity market has been. Another thing that stands out is just how weak precious metals have been relative to their peers.

While the rest of the asset class has posted solid gains on the year, gold and silver continue to trend lower. If this is truly a commodities supercycle, we’d expect to see some participation from this group. And, considering they’ve been in a downtrend for almost 18-months now as the rest of the space has been working, we’d expect it to happen soon. 

Let’s take a closer look at what’s going on with these shiny rocks.

First, here’s a chart with the trailing 12-month returns of our four major commodity indexes - energy, precious metals, base metals, and ags:

From the desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 100 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Check it out here.

The Hall of Famers is simple.

We take our list of 100 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

From the desk of Willie Delwiche.

The Fed is turning off the liquidity spigot and expects to start raising interest rates next year. There are plenty of historical studies showing the relatively benign impact of the first one or two rate hikes. This cycle, though, will be a bit different than what has been experienced in the past. Historically, the Fed is leading the way with interest rate hikes, moving toward tightening ahead of other global central banks. The muted impact of those initial rate hikes may be partly due to the fact that most central banks have still been accommodative.  That is not going to be the case this time around. Nine central banks have raised their interest rates in December alone and by the time the Fed makes its first move, a majority of central banks will likely be tightening.  

This is the video recording of our December 17, 2021, All Star Charts Crypto Weekly Strategy Session.

The wild ride in the stock markets this week is nothing if not revealing to us where the relative strength is hidden!

There's always a silver lining to volatility. The vulnerable stocks get exposed, the weak hands get shaken out, and what we're often left with is a pretty clear picture of where the strength is and which names are likely to lead us higher when things calm back down.

With this in mind, today's trade comes from the latest Under the Hood Report.

We have a new Options trade up this week.

We're buying an $MMC April 170/200 Bull Call Spread for around a $7.50 debit all in. This means we’re long the 170 calls and short an equal amount of 200 calls..

Check out our short video with the thought process behind these trades:

The US Dollar has been at the center of attention for the past few weeks. And who can deny the move that has come through in the Dollar Index?!

While the Dollar has halted its montser move for now, the dollar currency pairs are moving in a direction that's worth noting.

So let's take a look at Dollar with the INR.

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

It was only a month ago that we discussed the TIPS versus Treasuries ratio hitting its highest level since 2013 as investors prepared for rising inflation.

Fast-forward to today, and the inflationary backdrop looks very different.

Inflation breakeven and forward expectation rates have rolled over aggressively since the middle of November. This is illustrated by the TIP/IEF ratio, which recently undercut its May highs. Combine this action with the lack of follow-through on last week’s kick save from the 30-year yield, and the prospects of rates rising across the curve aren’t looking too hot.

But what does that mean for risk assets?

For starters, commodities will miss out on all the usual tailwinds that come with inflationary pressure. Let’s take a look at a chart that highlights that relationship.

This is the video recording of the December 16th Weekly Town Hall w/ Willie Delwiche

12/16/21 2:00 PM ET

From the desk of Willie Delwiche.

This week's FOMC meeting has received more than its fair share of attention. 

Many are no doubt tired of hearing about it. Some might even mentally paraphrase Thomas Jefferson (in Lin-Manuel Miranda's Hamiliton): Can we get back to prices, please?

Yes, in just a moment.

Yesterday’s headlines announced that the "Fed doubles pace of tapering". Unless you are paying close attention, this probably seems like confusing doublespeak. My friend Joe Kalish (at NDR) put it more succinctly, "Fed Turning Off Liquidity Spigot Sooner." 

The Fed will end asset purchases early next year. Based on current expectations, this will be followed by three 25 basis-point interest rate hikes over the remainder of 2022. Powell was clear to emphasize that this pivot, while compelled by higher than expected inflation, has been made possible by improving labor market conditions and strength in the overall economy. That messaging probably helped stocks shake off early weakness yesterday and rally into the close.

From the desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as a market of stocks.

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions… but there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club. We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports. Now, we’re also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

With soaring prices across the globe, inflation is cementing itself as the topic du jour to end the year.

Bitcoin continues to appear in the conversation as the new and upgraded gold. Proponents argue that Bitcoin is the superior inflation hedge.

The simple fact of the matter is that the "Bitcoin inflation hedge" story is just another narrative that we don't see being supported with sufficient evidence.