Over many years of doing this I've observed a few things.

One of them that stands out is how much more time investors spend focused on how much money they're going to make, and less time on what the market needs to do to prove them wrong.

You see, I don't care how high you think the stock goes. I want to know what the market would need to do to prove your thesis invalid.

That's way more important.

Any idiot can buy a stock that goes up. It's what you do with the stocks that don't do what you think they're going to do that separates the winners from the losers.

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 Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 100 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that which you can check out here.

The Hall of Famers is simple.

We take our list of 100 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

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

It’s been impossible to ignore the strength in commodities this year.

The CRB Index is up more than 50% over the trailing 52 weeks. During this same period, the S&P 500 is up 32%, and bonds ($TLT) are down more than 8%.

Commodities are the clear leaders.

With breakouts from some of the most commonly observed contracts -- crude oil, copper, and natural gas -- more investors are coming around to the idea that commodities are a viable asset class.

Now that the buzz surrounding this once-forgotten corner of the market is growing, we’re seeing many commodities run into overhead supply zones. We think it would make sense for these contracts to consolidate here. Following such explosive moves off last year’s lows, some sideways action at resistance would be normal behavior.

Let’s look at a few charts that are at logical levels to digest gains.

First up is natural gas futures:

If you take the US Dollar out of the equation, it's a much different story for Gold.

While Gold continues to struggle below its 2011 highs, when priced in other currencies, it's been consolidating well above those former highs.

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

September saw significant selling pressure in equity markets. The S&P 500 suffered its worst drawdown since last year, and many of the major indexes made a lower low. But when we look under the surface, it really wasn’t that bad. 

We didn’t get an expansion in new lows to confirm the new lows in price. Instead, these readings remained muted across most of the major averages in the US.

Since then, the bulls have regained control. Breadth has improved throughout October as the indexes have rallied back toward their former highs. Although we haven’t seen a real expansion in participation at the index level, things have definitely been moving in the right direction.

Let's talk about it.

Here’s a look down the cap scale at new 52-week highs for all three S&P indexes, from large to small:

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

On Tuesday night we held our October Monthly Conference Call, which Premium Members can access and re-watch 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!

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

It’s no secret. 

As investors, we've been rewarded for buying stocks and commodities over bonds for more than a year now. And this will most likely remain the case, as more evidence suggests we’re in an environment that favors risk assets.

The copper/gold ratio hitting new seven-year highs, AUD/JPY testing its year-to-date highs, and cyclical stocks assuming leadership all point to an increasingly risk-on tone.

But for some of us, it’s not as simple as selling bonds and walking away. In some scenarios, we must have exposure to the bond market.

If that’s the case, we want to focus on the riskier areas of the market, just like we’re doing with other asset classes.

Let’s look at a few charts that direct our attention to the strongest areas of the bond market.

From the desk of Willie Delwiche.

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

Most risk assets peaked during Q1 or May of this year and have consolidated in sideways ranges ever since.

But the bulls have started to take control of many of these trends. We're seeing more and more upside resolutions -- and this phenomenon isn't limited to Crude Oil, Rates, AUD/JPY, and cyclical stocks. Similar patterns are also playing out when we look at intermarket ratios, particularly those we use to measure risk appetite.

In today’s post, we'll dive into one of our favorite risk-appetite relationships and check for price confirmation in a variety of ratios.

First up is none other than large-cap consumer discretionary versus consumer staples stocks: 

They love writing about 'Selling in May and going away'.

Every year, they just can't get enough of it.

But what about, "Remember to buy in November"?

Historically the best 3 month period of the year for stocks is from November through January.

As my pal Jeff Hirsch likes to say, "Buy in October and Get Yourself Sober".

Here are all the seasonal cycles for the S&P500. The Green line includes every year since 1950 (1-year Cycle), the Blue line includes every year ending in 1 since 1951 (Decennial Cycle), and in Gray every post-election year since 1953 (Presidential Cycle):

(While on vacation until Oct 26th, I’m going to be sharing some anecdotes on my favorite trading strategies: why I use them, when, and how I manage them once they are on.)

Ok, so perhaps there's some recency bias here as the most recent bullish Risk Reversals I've put on have worked. Really though, all that has done is remind me that I should probably do more of these trades.

In a nutshell, a bullish Risk Reversal is a trade where we short naked puts and use those proceeds to pay for long calls. That's right, the market pays me to get long!

The trade is put on for a small net credit (ideally), and the short term goal is to ride an increase in the value of the calls which will allow us to sell a portion of them and use those proceeds to buy-to-close all the naked short puts. This then leaves us long the remaining portion of our calls for free! The calls could eventually reverse on us and go to zero, but we'll still keep the credit we received when we originally put the trade on (plus whatever credit we may have gained when we sold some calls to close all the puts). This is a great situation to be in!