"If you can't find a stock in America to buy you're not looking hard enough, JC"
"I live in America, JC"
"I don't know anything about those stocks in other countries, JC"
Trust me, I hear all these things.
Not so much from you guys, as it is my friends and colleagues in the business.
I feel like readers of Allstarcharts know better, and also we have a very global audience.
So the recency bias that oozes out of most American investors, who have gotten accustomed to the U.S. being the best place to be, forgot what it's like when that's not the case.
You're talking about a decade of outperformance, and depending on how you measure it, you can even argue that's it's been a decade and half of U.S. dominance.
But believe it or not, stocks traded before 2011.
The U.S. wasn't always the global leader in equities.
I remember last year getting yelled at and trolled online because I was talking about breadth improvement.
Just because their stupid computers weren't telling them that it was time to buy didn't stop me and my team from simply counting how many stocks were going up vs how many were going down.
Boy did that serve us well as stocks have absolutely ripped higher over the past couple quarters.
We've been in a raging bull market while most investors keep asking me when stocks are going to bottom.
That's how far removed most people are from reality.
In fact, market breadth has improved so much that we're now seeing more stocks making new 52-week highs than we saw at the peak in the S&P500, Dow Jones Industrial Average and Nasdaq back in late 2021.
Yes, more stocks are making new highs today than there were at the "market's highs":
From the desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
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.
Forget about what Powell said or whatever you heard on the street.
We’re still looking for risk assets to buy.
That includes stocks and commodities. Despite the dollar applying downside pressure to risk assets this morning, I want to share one commodity that looks ready to rip…
Check out the weekly chart of Cotton futures:
Cotton experienced a sharp decline last year following an impressive run-up off the 2020 lows. Fast forward to today, and it’s challenging a critical retracement level from below at approximately 89.
The bulls have hammered this level since October of last year. And the way I learned it…
The more times a level is tested, the higher the likelihood it breaks.
To be clear, I don’t care what he said. Instead of hanging on the Fed Chair's words, I prefer to focus on the markets. I find it more enjoyable.
But, boy, did markets respond!
The most striking aspect of yesterday’s reaction was highlighted by the relative strength of growth stocks.
Check out the overlay chart of the US T-Bond ETF $TLT and the ARK Innovation ETF $ARKK: These charts tend to move tick-for-tick, as long-duration assets benefit from the same market environment.
Excluding price action itself, relative strength has to be the most underappreciated indicator.
It's impossible to outperform if you own assets exhibiting relative weakness.
If a stock is underperforming, there's a reason why. It's not until months after the fact do investors discover the "fundamental" drivers anchoring that stock.
The same can be said for when a stock is outperforming.
Look at it like holding a beach ball underwater. You can feel the pressure on your arms, and when that pressure is released, the ball explodes into the air.
Think about the selling pressure in the market: When the selling pressure alleviates, the stocks showing relative strength tend to be the first ones that shoot higher.
These principles are universal across every market.
As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!
One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn't just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
