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

Commodities have been on an absolute tear, with our Equal-Weight Commodity Index up almost 40% over the trailing year. 

But ever since Q2, the vast majority of the space has been chopping sideways along with most cyclical assets. 

Sounds a lot like stocks, doesn’t it? And while we’re still yet to see any major resolutions from equities, we have seen some bullish developments in the commodities market of late.

Energy asserted itself as the new leadership group with a series of major breakouts. Both crude and heating oil broke to new six-year highs, while gasoline futures completed a seven-year base. 

Then there’s natural gas, which gained more than 25% during the trailing month and tested its 2014 highs just above 6.

The emerging leadership from energy comes as no surprise, as we noticed signs of relative strength last month.  

Now that it’s here, what are the implications for the rest of the commodity space and global risk assets?

This is the video recording of October 8th 2021 Weekly Jam Session with Sean McLaughlin.

From the desk of Willie Delwiche.

We like to say that dollars flow to where they are treated best. If that is the case, commodities could soon see a surge of inflows. The DBC/AGG ratio shows commodities surging to new multi-year highs versus bonds and the DBC/SPY ratio shows strength versus stocks as well. DBC has more than doubled up SPY on a YTD return basis (43% vs 18%). Commodities are proving again to be a place of relative safety when inflation and bond yields are on the rise. For many investors, commodity exposure isn’t even included as part of the asset allocation discussion. At least, not yet.

This is the video recording of our October 8, 2021, All Star Charts Crypto Weekly Strategy Session.

One thing the team and I have observed during recent market volatility is how well big banks have held up. Yes, they've pulled back like everybody else. But their relative strength remained in tact, and most charts in the sector held above significant support levels. In other words, the big picture is still pointing to higher prices.

So with that being the world we're living in right now, its time to place a bullish bet on a name everyone loves to hate.

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

Back in August, we presented two opposing views of the relationship between stocks and bonds.

The question was, after running into resistance at a key extension level, in which direction would the $SPY/$TLT ratio resolve?

Would stocks break higher relative to bonds, in the direction of the underlying trend?

Or would the ratio roll over in favor of bonds? It would certainly be a logical level for a trend reversal...

Fast forward two months, and we finally have our answer.

Turns out it was the former -- stocks are breaking higher relative to bonds. Here's a look:

From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Using the S&P 500 as your investment proxy, you’re probably happy with your returns so far this year.

That's even with the 5% pullback we finally saw last week -- the first 5% pullback for the S&P 500 in 2021, and it took 229 trading days.

But the averages aren’t telling the whole story. Some stocks are going up, but most are not. We've been pounding the table about this for months already, and it's been the main theme during the first three quarters of the year.

Unless you’ve been living under a rock, you already know the current environment is an absolute mess, as the weight of the evidence continues to hang in the balance.

In this post, we’ll show you why the S&P 500 is not the stock market and the stock market is not the S&P 500. 

When we analyze equities as a “market of stocks” rather than “a stock market,” it becomes clear that we're in the thick of a correction that started as early as Q1.  

Here at All Star Charts, we like to call this a stealth correction!

This is the video recording of the October 7th Weekly Town Hall w/ Willie Delwiche

10/07/21 2PM ET

From the desk of Willie Delwiche.

My team just participated in our final cross country race of the season, and I was thrilled with our performance. 

Our focus this season was effort and the improvement that follows. This week, our runners delivered. Big time! 

We had 17 athletes compete. Of this group, 13 matched or posted their best time of the season -- a few by wide margins. 

These accomplishments didn’t show up on the leaderboard. The most competitive runners on the top teams ran mile after mile over the course of the summer. As you would expect, they received their fair share of medals and accolades. 

But for us, it was a race full of individual victories.  

The short puts we entered on $SPY on Monday hit our profit target today and we are out. Profit target hit in under 4 trading days. We’ll take it!

Meanwhile, the $FCX Bullish Risk Reversal we entered yesterday has quickly moved in our direction.

I’m not one to look a gift horse in the mouth, so I’m going to take this opportunity to remove the risk from the trade.

For details on the trade, you can review it here. In short, we sold naked short puts to pay for the cost of our long calls. Thanks to today’s move, we’re able to sell some of our calls to pay for closing our entire naked short puts position. And we did that today… 

Just like that, Bitcoin reclaimed its September highs!

In a report a few weeks ago, we outlined:

Derivative speculators are bearish, while long-term spot investors are continuing their accumulation. These are fertile grounds for a powerful disbelief rally that can trap bears.

We've seen this play out over the last few weeks, and yesterday's action only confirmed our suspicions, where there was a notable short squeeze that drove a $3,000 move in the space of a few minutes.

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.