This is our ASC Research Q4 2021 Playbook.
- Stocks (International & U.S.)
- U.S. Sectors & Industries
- Market Breadth & Sentiment
- Commodities
- Currencies
- Intermarket Analysis
- Crypto Currencies
- New Trade Ideas
- Overall Strategy
Expert technical analysis of financial markets by JC Parets
by JC
This is our ASC Research Q4 2021 Playbook.
With the current market environment giving us many mixed messages, what better time to dive in and see what’s happening underneath the surface?
by JC
One thing unique about the market is that the game is never over. There aren’t four 15-min quarters or two 20-min halves like in sports.
In those endeavors there is a beginning and an end.
You know who won (or who tied in some cases). But the match is over, and there will be another one in a few days or a few months, depending on the sport.
In the market, it never ends. This can cause issues psychologically, so it’s something we should all be aware of and keep in mind.
But if you ask me, currently the bulls are scoring a lot more points. This is the first time we’ve seen that since Q1 this year, when the bears started running up the score.
Look at the S&P500 break out to new all-time highs relative to US Treasury Bonds. [Read more…]
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
We held our October Monthly Strategy Session last night. Premium Members can access and rewatch it here.
Non-members can get a quick recap of the call simply 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.
by Ian Culley
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
The US dollar marches to the beat of its own drum.
Interest rates are rising across the curve, sparking strength out of economically sensitive areas within stocks and commodities.
Crude oil and the energy-heavy CRB Index are breaking to new six-year highs and the energy sector SPDR is testing a crucial area of former support turned resistance — all while the US Dollar Index is catching a bid.
It’s not every day we see the dollar and commodities rally in tandem.
This environment suggests the dollar should be rolling over or chopping sideways at best. Yet it continues to show strength!
When markets don’t do “what they should,” that’s valuable information. And in this case, it raises some important questions.
How often does the historically inverse correlation between the dollar and commodities decouple?
And how long do these divergences in their relationship tend to last?
Let’s dive in to see if we can find some answers!
by Ian Culley
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
The US 10-year yield has made a decisive move back above 1.40% in recent sessions.
We’ve been pounding the table about this critical level for months now–and for a good reason. It’s a vital component of the global growth narrative and rotation into cyclicals.
And most investors probably aren’t prepared for it!
Yesterday, JC and Steve discussed areas that demand attention in a rising rate environment and how we should position ourselves. You can check it out here.
Think cyclical and value stocks. And don’t forget economically sensitive commodities like energy and base metals.
But what about currency markets?
For starters, most currencies versus the US dollar should be beneficiaries of rising rates. This is particularly true for commodity-centric currencies like the Australian dollar, the Canadian dollar, the Russian ruble, and the South African rand.
With the US dollar Index $DXY still pressing on the upper bounds of its year-to-date range, let’s check out some other currencies that are offering trading opportunities in this new rising rate environment.
This week, we’ll look at the Norwegian krone versus its neighbor, the Swedish krona NOK/SEK.
This is the recording from the live September 2021 Conference Call for Members of the Allstarcharts India! Before getting into individual stock ideas in India, we’re going to first start with the global macro perspective. Once we identify the direction of the underlying trends from a structural and broader view, then we’ll dive into the NIFTY Indexes on both longer-term and short-term timeframes. We want to look at Large-caps, Small-caps, and everything in between before getting into the Sector and Industries themselves like Energy, Banks, and Pharma.
This is when we finally break things down to the individual stock scenario with identified risk vs reward opportunities. That is what this is all about – aligning ourselves in the direction of the underlying trend while at the same time identifying where the risk is to make sure the potential reward is skewed exponentially in our favor. You will find that throughout this process we discuss Momentum, Fibonacci and Relative Strength. I encourage you to check out the Education Section so you know exactly where I’m coming from when you hear me mention these tools.
Here is the video in full:
by Ian Culley
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
In recent weeks, the market has taken a risk-off tone as dollar-denominated risk assets have come under increasing pressure.
Major US stock indexes have pulled back, and procyclical commodities such as crude oil and copper continue to chop around beneath overhead supply.
Interestingly, we haven’t seen much of a bid in defensive assets through the recent bout of downside volatility. US treasuries have been relatively quiet, and the dollar remains below its August highs. Meanwhile, bond-proxy sectors like Utilities and Staples continue to make new relative lows.
None of this suggests the kind of defensive positioning that would be typical in an environment where risk assets are getting hit.
But what about one of the most significant safe-haven assets of all… the Yen?
Let’s take a look at how the Japanese Yen is setting up against other major currencies right now and what it could mean for the market at large.
by Ian Culley
From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley
Last night we held our September 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.
Let’s get right into it!