Precious metals have been bearing the brunt of being the most underperforming asset class for over a year now. While we saw stocks and commodities rally, precious metals were moving sideways or undergoing correction. And this was regardless of where the US Dollar was headed!

But there's a movement coming through in the precious metals, which is important to observe. We are here to do just that.

Traditionally speaking, the Dollar and Gold have moved in the opposite direction. They have an inverse relationship so to speak, and that is depicted by the chart below.

As can be seen in the image below, the US Dollar and Gold have a strong negative correlation. This is evidenced by the correlation coefficient in the bottom pane. While there are times when they move in the same direction, the traditional relationship catches up pretty soon.

Notice how when the indicator contracts, the negative correlation reduces. But the inverse relationship persists beyond short bursts of positivity.

Click on the chart to zoom in.

This is the video recording of the November 2021 Mid-month Conference Call.

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

The US Dollar Index $DXY is pressing to new highs, disregarding what many think it should be doing based on historic intermarket relationships.

Considering the bullish developments and new highs from risk assets, the strength from the US dollar continues to be a head-scratcher.

But will the breakout in the DXY hold, or will it roll over and confirm the signals coming from bonds, stocks, and commodities?

When we broke down the US Dollar Index last month, we pointed out that its strength was rather narrow in terms of how it was performing relative to most individual currencies. Long story short, the recent rally in DXY has been fueled primarily by its two largest components -- the euro and the yen. These two currencies make up more than 70% of the DXY weighting, and the fact that they are at new 52-week lows explains why the index is at new highs.

From the desk of Willie Delwiche.

Key Takeaways:

There's been some notable volatility over the last 24 hours, with Bitcoin and Ethereum losing 8% and 10% respectively over this period.

Throughout this recent selling, over $840 million worth of positions have been liquidated.

We want to emphasize that Bitcoin is still in its sideways range, and we haven't seen a decisive breakdown. As we outlined in yesterday's note, looking out longer timeframes, this merely seems like a springboard to further upside.

If Bitcoin is above 58,000, we need to continue giving the bulls the benefit of the doubt.

If on the other hand Bitcoin loses these lows, then a more defensive approach is likely better.

For those with longer timeframes, a potential retest of 53,000 would provide an excellent level to add to long-term spot positions, if we even get there (not the bet we're making).

As we make our way through the earlier stages of the most bullish time of the year, who better to talk to than Jeff Hirsch, Author of the annual Stock Trader's Almanac.

When it comes to Technical Analysis, what we're doing is analyzing the behavior of the market, and therefore market participants. Seasonality falls under that umbrella and Jeff Hirsch is the ultimate authority on the subject. He's had a front row seat his entire life to how markets trend during different times of the year.

In this episode, we talk about "The Best 6 months", the 4-year Presidential Cycle, Commodities Seasonality, and we even get to learn a little more about his father Yale Hirsch, the originator of the Almanac back in the 1960s.

The Adani Group has been quite the wealth generator over time. But, in brief periods, they also tend to hit lower circuits. SO definitely a lively bunch, that's for sure!

It's been a while since we updated the trends in this space, so this is just that. An update in the levels that are to be followed.

So let's take a look, shall we?

First up, we like to see where the group as a whole is and what the trend is like there. Here's where the ASC custom Adani Group Index is as of today.

We saw the stocks making their highs in June this year, following which the group stocks went into a corrective mode (both time and price). What we can also see here is that the index hasn't crossed the high made in June and is still trading beneath it. We'd like to see this breakout here to be heavily bullish on this group again. Until then, it's a selective game.

Click on the image to zoom in.

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 November 12, 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.

• Recent leaders have become near-term laggards, with Energy and Financials dropping to the bottom of the shorter-term relative strength rankings. Energy remains strong overall across the rankings and our industry group heat map. The cooling in Financials could be more significant.
• Materials is gaining strength from a sector ranking perspective and is seeing improving trends in our industry group work. We are also seeing pockets of strength within Industrials (Capital Goods and Transportation) and Tech (Semiconductors).

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.

A stock recently got on our radar after share prices exploded higher following a recent earnings report.

Now that the market has given players in this stock some time to marinate in the new reality presented during this last quarterly report, options premiums are beginning to return to normal (ie "low") prices. And this is making it more compelling for us to position for what we feel is another leg higher.

Over the last few weeks, we've been making the case that Bitcoin is likely to resolve to the upside and head toward our first target of 85,000.

In a note we published last Monday, we outlined a variety of developments taking place that's been supporting our macro bullish thesis. Since then, Bitcoin has continued to consolidate following its run-up after achieving all-time highs, and we haven't seen any dramatic price action in either direction.

So, in today's post, we'll be revisiting some of the data points we're heavily weighing towards our approach in the coming weeks.

Price Stability at a Local Maximum

In recent weeks, we've been discussing the compression of volatility in a lot of crypto assets, primarily Bitcoin.