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

Markets trend. Trends persist. 

Those crucial Dow Theory tenets form the foundational premises of technical analysis.

As technicians, identifying trends is a central component of our work.

But, most of the time, markets remain range-bound, as we experienced during the choppy mess that dominated the stock market and so many risk assets last year.

However, during that time, commodities continued to rip higher.

Now that the rally in raw materials is reaching significant areas of overhead supply, it would make sense for this leadership space to follow stocks and enter a corrective period.

In other words, the uptrend in commodities that has persisted since 2020 is likely to take a breather and turn into a sideways trend.

Let's talk about it.

This is the video recording of the May 2022 Mid-month Conference Call.

We discussed:

• The average stock down 30-45% depending on the exchange
• Most consecutive weeks of more new lows than new highs since 2008
• How will US Dollar near former highs impact stocks
• Energy Stocks & Commodities at a Critical Juncture
• Major Bond Futures Contracts at Key Support: 2s, 5, 10s & 30s
• Consumer Discretionary the worst performing sector
• New Short Ideas in Growth
• Stocks Showing Relative Strength bucking the trend
• International weakness - stocks are below overhead supply
• Commercial Hedgers continue to buy Energy Futures
• Precious metals underperforming stocks and commodities
• Chilean Lithium continues to shine
• Agriculture stocks and commodities still trending higher
• A look into some recent insider transactions
• Crypto at key support levels, similar to the bond market

Gold as a commodity is close to the heart coming from India. It is generally the first instrument of investment. Most often it's also the first gift for a newborn baby. We also have important days such as Akshaya Tritya and Diwali when retailers consider buying gold auspicious.

The inherent faith in the yellow metal to save us from bad days has been a part of the psyche for a long time. With that in mind, the levels to track in Gold become important from a personal and professional standpoint.

Gold has been battling several levels of resistance for a while now. The last time that Gold was making waves in the market was in August 2020 when the price traded close to 56,200. Since then, the price has been on a sideways journey.

In the week gone by, the price slipped below the support of 50,670.

So what are the levels we're tracking now after this move? Let's take a look!

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

There’s always a bull market somewhere.

But the environment is tough right now.

Volatility is sweeping across markets. The dollar is catching a defensive bid. And the major averages continue their downward trajectory as investors desperately look for signs of a bottom. 

Yet, despite the bearish action gripping markets, we’re still finding bases we want to buy.

And, to no surprise, many of those smiley faces are in the commodities market.

That’s where we want to focus our attention.

Today, we'll highlight the wheat complex, outlining some tactical setups that complement our bullish structural outlook for commodities and grains.

Let’s dive in!

First up, we have Chicago wheat:

As we progress into Q1 of Fiscal Year 2022-2023, this playbook outlines our thoughts on every asset class and our plan to profit.

This playbook will cover our macro view, touching on Equities, Commodities, Currencies, and Rates, as well as outline our views on the major nifty indices and the sector/thematic indices.

We also cover individual stocks we want to be buying to take advantage of the themes discussed in the playbook.

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

A few weeks ago, we pointed out widening crack spreads and what they meant for oil refining stocks. You can read more here, as we explain how wider crack spreads support higher prices for this particular area of the market.

Three weeks later, crack spreads have widened to their highest level in more than a decade.

This post is not about crack spreads, though. It’s about energy and how everything in the space is working these days. 

Bullish rotation continues to be the theme for energy.

This week, gasoline was the standout, booking a 10% gain and breaking out of a massive base to new all-time highs.

Let’s take a look at the breakout in gasoline futures and discuss what it means for crude oil.

This is the video recording of our May 3rd Monthly Charts Live Strategy Session

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

The rally in some commodities has been near-vertical this year.

And we’re seeing this strength across the entire complex -- from energy contracts like crude oil to base metals such as tin and even grain markets like wheat.

While these kinds of moves are bullish over longer time frames, when things get too hot (like they have), it’s often not sustainable on a tactical basis. 

This is the situation right now for a lot of commodities. We think a period of well-deserved digestion is underway for the broader asset class.

But this doesn’t mean there won’t be fresh up-legs taking place in some individual contracts.

As this new secular bull market matures, pockets of strength will rotate across the space. Our only job is to find the emerging leadership.

Today, energy and base metals are correcting after explosive rallies while strength emerges from the agricultural complex -- especially grains.

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

Equities continue to get hit. And yesterday, commodity-related stocks were not immune to the selling pressure.

Energy, metals, and natural resources, in general, all sold off into the close. The inflation, interest rate, and commodity trade had a really rough week.

It's never a good thing when the leaders get hit like this. At the same time, two days really doesn’t make a trend.

Before we get sucked into calling peak inflation, let’s zoom out and put all this near-term volatility into the right context.

When we do, it reconnects our eye with the underlying trend – which is unequivocally higher. It also becomes clear that many of these stocks are finding resistance at logical levels – areas where we would expect these stocks to digest gains. 

And that’s exactly what they’re doing!

Let's take a look!

First up is a triple pane chart of the Metals & Mining ETF $XME, Copper Miners ETF $COPX, and the Steel ETF $SLX: 

This chart gives a great read on how base and industrial metal stocks are doing.  

This is our ASC Research Q2 2022 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?

• Stocks (International & U.S.)
• U.S. Sectors & Industries
• Market Breadth & Sentiment
• Commodities
• Currencies
• Intermarket Analysis
• Cryptocurrencies
• New Trade Ideas
• Overall Strategy

This is the video recording of the April 2022 Mid-month Conference Call.

We discussed:

• The Major U.S. Indexes and Current Technical Analysis
• Commodities making multi-year highs vs Stocks
• Our Sentiment Composite Indicator shows excess Pessimism
• Value Stocks continue to lead vs Growth Stocks
• Energy Stocks and Commodities Trades
• Agriculture Stocks and Commodities
• Base Metals & Precious Metals
• The US Dollar vs US Dollar Index are very different
• Global Markets: Pockets of Strength & Weakness
• Bonds Yields and Yield Curves
• What To Do With These Beat Up Growth Stocks
• Bitcoin Correlations & New Crypto Trade Ideas