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 March 4, 2022. This report is published biweekly 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.

We use a variety of sources to generate the list of most popular names.

There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

Not many people know this, but I used to be a gold bug way back in the day.

Mid-2000s and into the financial crisis and beyond?

I was Mr. Gold Bug.

Any good technician was. That's how price told us to behave.

But then a funny thing happened. A combination of price and common sense proved that being a gold bug was no longer a good idea. That was about a decade ago.

And you know how humans are. Many of those angry little buggers stuck around and held other people's bags this entire time, while stocks and other risk assets have ripped making everyone rich, except for gold bugs.

It's funny how life works.

Because I think we might be back.

It's hard not to be in the Rocks > Stocks club these days.

Here's a good chart showing what's going on:

From the desk of Steve Strazza @Sstrazza

We held our March Monthly Strategy Session last Tuesday. Premium Members can click here to review the video recording and download the slide deck.

Non-members can see some highlights from the call 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.

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.

It's happening.

Investors are bearish.

Especially American ones with a ton of Growth exposure!

Want to know what a bag holder looks like? I encourage you to take a look at your typical American portfolio with a ton of Technology stocks in it, Consumer Discretionary stocks and virtually no exposure to Commodities and Latin American equities.

Of course sentiment is bad. It should be bad!

But this bad?

More Bearish Financial Advisors than Bullish ones?

That doesn't happen very often.

It's always fun dropping by the Ritholtz office in New York City.

Basically what happens is we yell at each other for about an hour, and then we go out to eat and drink until we pass out.

It's pretty great.

On this episode of the Compound and Friends, I sit down with Josh Brown, Michael Batnick, and my old pal Dan Nathan joined us this time as well.

As usual, we ripped through some charts, but we also discuss the best burger in New York City.

I thought my answer was the right one. But it turns out Dan Nathan was right all along. I trust this man with my life.

Hope you enjoy!

It's Saturday Morning Chartoons time. 

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

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

Commodities are having their best week since 1970. And if you don't know what happened after that, let's just say it was a good decade for them as a group.

The CRB Index is up more than 13%. Crude oil is trading above 100. Wheat futures opened limit up last night, “dotting the chart.” Base metals such as aluminum and tin continue to print all-time highs.

And even precious metals have joined the party! 

Could it get any more bullish?

As it turns out, it can…

After almost a year of sideways action, Dr. Copper looks ready for a fresh leg higher, as it just closed the week at new all-time highs!

Here's a close-up look at the continuation pattern copper has been consolidating in since May of last year:

From the desk of Steve Strazza @Sstrazza

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.

Here’s this week’s list:

From the desk of Steve Strazza @Sstrazza

Dividend Aristocrats are easily some of the most desirable investments on Wall Street.

These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve.

That's why we're turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we're curating a list of stocks that have raised their payouts every year for five to nine years.

We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money."

Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

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.

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

We could sit back and speculate on what measures the Federal Reserve is likely to take to curb inflation. But it wouldn't change the fact that inflation is already here.

We’d rather focus on what market participants are doing now to position their portfolios for these inflationary pressures.

Since last year, inflation has gripped markets, and we don’t foresee it going away anytime soon. We think the best course of action is to get used to this environment and focus on assets that tend to perform well during periods of inflation.

One of our favorite ways to measure inflation expectations is by analyzing Treasury Inflation-Protected Securities (TIPS) versus Treasuries.

Relative strength from TIPS implies that investors are positioning themselves for a general increase in the prices of goods and services. That’s exactly what we’re seeing today.

Let’s take a look and discuss what we want to do about it.

Here’s an overlay chart of the $TIP/$IEF ratio and the US five-year breakeven inflation rate: