What's on your mind these days?

I'll tell you what I'm thinking about.

I'm used to a market where stocks struggle when the US Dollar are US rates are rising. And that's what we've seen all year.

And while the data certainly points to a market of stocks that have been grinding mostly sideways over the past few months, stocks haven't done nearly as bad as you'd think, considering just how strong the Dollar has been and how much rates have risen.

So the question for me is whether these consolidations are going to resolve higher or lower?

And what the implications might be....

A lower resolution here could be a massive tailwind for stocks.

Remember, during Election years, the market tends to bottom in May ahead of a very strong summer, particularly when there is an incumbent candidate.

If these resolutions are, in fact, to the downside, then that's exactly what I would expect to see happen:

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.

From the Desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 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 Uber and Paypal.

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. Click here to check it out.

The Hall of Famers is simple.

We take our list of 150 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

We held our May Monthly Strategy Session earlier in the week. 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.

From the Desk of Ian Culley @IanCulley

The talking heads are about to call the top in commodities.

It’s coming, so we might as well prepare. 

In fact, it’ll only get louder if the US dollar follows crude’s lead…

Crude oil and the dollar have traded in sync for a few years now (mainly due to the strong positive correlation between the buck and interest rates).

During Q3 of last year, the energy sector rallied with the US dollar while most of the market fell under pressure. 

This relationship has been so strong we actually like swapping bonds for energy stocks in the new sixty-forty portfolio.

But crude oil, interest rates, and the US dollar have rallied for almost four straight months. 

They’re all due for a correction.

Here’s crude oil leading the way, violating a multi-month trendline:

From the Desk of Ian Culley @IanCulley

So far, the dollar-yen is playing its part with a little help from Tokyo.

Falling dollar, falling rates, falling dollar-yen…

That’s the mantra reverberating throughout the market. 

But will interest rates get on board?

Check out the US 10-year yield climbing within a four-month channel: 

The 10-year is reacting to the channel’s upper boundary after stalling 25 basis points short of its October 2023 peak. 

Those former highs and rising trading range mark a logical area to witness a near-term pullback.

Last night was my favorite thing that we do around here.

We had our LIVE Monthly Charts Strategy Session for Premium Members of ASC.

This hour-long, 150-chart Monthly ritual allows us to take a step back, zoom out, and identify the most important primary trends across markets.

There is nothing we do here that adds as much value to my process than preparing for this call.

Premium Members can watch the replay here and download all the slides.

If you're not a Premium Member yet, you can fix that here quickly.

The bottom line is this:

Markets are a mess. They've been a mess. And this year is very different than last year.

Look at the Equally-weighted S&P500 and Nasdaq100.

While these are certainly good overall gauges for the health of the US Stock market, always, in this particular environment they are even more representative of what's going on out there.

This is the video recording of our May 1st Monthly Charts Live Strategy Session

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

From the Desk of Ian Culley @IanCulley

The Japanese government isn’t playing games.

Currency crisis or not, Tokyo is willing to defend the yen in the open market. It's proven this multiple times over the past three years, and today’s FOMC-related volatility will likely test its resolve. 

Considering previous yen-buying interventions, the dollar, interest rates, and the dollar-yen pair could be headed lower in the coming months.

Before we dive into the yen, here's a quick update on the action in the euro and pound.

The euro retested its breakdown level from earlier this month, forming a bear flag:

A close below 1.06 completes the flag pattern and sets a rough downside objective of 1.0450.

I know I've already said it a lot over the past few months, but for those people in the back who may not be able to hear so well...

THIS YEAR IS NOT ANYTHING LIKE LAST YEAR.

The strategies that worked so well throughout 2023 are not the ones working this year.

Last year's leaders are some of the worst stocks in 2024.

The leaders in 2024, in many cases, were some of the worst sectors in 2023.

It's not bad or good. Better or worse. It's just different.

The better you get at adapting to the current environment, the fewer headaches you're going to have.

I'm 42 years old. I've been doing this for over 2 decades.

I have 3 kids.

Do you think I need more headaches at this point in my life? Or fewer?

And so that's why we've adapted our strategies to the current market, instead of trying to go to the beach in the winter, or wear a raincoat on a beautiful sunny day, like many investors like to do because they haven't bothered to check the weather.

So speaking of checking the weather...

The month isn't over yet but I peaked.

How many assets can you think of that have been positive every single month this year?

Where do you find the most consistent leadership?

Is it in Technology?

No. Tech is down over 4.5% the past 2 months.

Is it Consumer Discretionary?

Nope. It's down 2 months in a row, falling almost 3%.

The answer is the US Dollar and Crude Oil Futures.

As we enter the final day of April, these 2 assets have been positive every month so far in 2024.