This is the video recording of our July 6, 2021 Monthly Charts Live Strategy Session

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

As US Dollar strength unfolds and US treasuries continue to catch a bid, it’s no wonder our motto around here has been bonds, cash, champagne.

It’s been working, and it continues to work!

We’ve been downright obnoxious about our tactical view of the US Dollar over the past month.

A potential bounce was developing, strength emerged, and we pointed out numerous crosses in which the dollar was poised for a push higher.

The market environment directed our focal point toward the Dollar. And now that it appears risk is coming off the table, we’re shifting our focus to the Yen.

Usually, when we talk about risk-on/risk-off behavior and the Yen, the...

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

We’ve been pounding the table about the broad-based strength from the US Dollar since earlier this month. Due to the momentum of its recent move, we believe this rally could have legs beyond just the near-term... But we'll address that when the time comes.

For now, we're positioned to take advantage of this swift rebound from the Dollar through a handful of USD crosses currently offering favorable risk/rewards. 

Though the Dollar gave some of this month's gains back last week, our short-term outlook remains higher. As I write this, many G-10 currencies like the Euro, Pound, Aussie, and Canadian Dollar are all rolling over relative to USD. 

We’ll be revisiting this theme plenty as it plays out over the coming weeks to months.

But in the meantime let’s focus on a currency pair that’s bucking the trend, the US Dollar-Brazilian Real $USD/$BRL.

Here’s a weekly bar chart of USD/BRL...

From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

We've been pretty obnoxious about our position that markets are a total mess these days. But it is what it is, and we can only play the hand we're dealt. 

You can try picking profits out of a trendless environment but at the end of the day, most investors are better off on the sidelines. Imposing one's will upon the market is rarely a winning strategy. We'd rather trade what's in front of us. 

We've covered the best evidence from both the bulls and...

From the desk of Steve Strazza @Sstrazza

We have been adamant about our view that we are in a rather messy environment. For this reason, we've been approaching markets with caution for months now.

Up until earlier this year when risk assets began consolidating in sideways patterns, it had been nothing but blue skies and new highs.

When the weather report is sunny, the water is calm, and the sky is clear, we know the weight of the evidence is with the bulls and we can focus our attention on finding the best opportunities in the strongest areas as ways to express our thesis.

But that's just not where we find ourselves today. The current forecast is cloudy with a chance of rain. And it's already been overcast for months!

And when the outlook is murky, as it is now, we want to take a step back and really weigh the evidence that's in front of us. We need to stay up on incoming data points and monitor how markets react with so many charts currently at key levels of interest.

Luckily, we can use the fact that so many risk assets are at inflection points to our advantage, as each upside or downside resolution will bring us...

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

There’s no question the landscape in the currency market has dramatically changed with the US Dollar reasserting its dominance in recent weeks.

You can read more about this in our weekly currency post, but here’s an excerpt with the long and short of it:

King dollar is definitely back in the driver’s seat from a tactical viewpoint as we’ve seen a significant shift in favor of USD over the near term. But even the intermediate and long-term trends for most major FX pairs have flipped in the direction of the Dollar over the past month or so.

Considering this broad-based strength, it’s clear that bulls are back in control of the Dollar… at least from a near-term perspective.

So, earlier in the week we analyzed the US Dollar Index $DXY and outlined some critical levels to watch over the short run.

Now, we’re going to take it a step further and highlight a handful of tactical trade ideas in USD crosses as vehicles to express our bullish thesis. 

Let’...

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

Last week, we asked the question...is it time for a dollar bounce?

And the market quickly answered with a resounding, YES!

We’ve highlighted several currency pairs challenging crucial levels of support and resistance. Last week, we saw the USD take control at those key levels. 

Both the EUR/USD and GBP/USD turned away from critical areas of former support turned resistance. The USD/CAD moved sharply higher from a major area of support. The AUD/USD broke back below a key retracement level after consolidating for the first half of the year. And the NZD/USD retreated from an area of...

From the desk of Steve Strazza @Sstrazza

Check out this week’s Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the context of the big picture and provides insights regarding the structural trends at play.

Let’s jump right into it with some of the major takeaways from this week’s report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

• Macro Universe:
  • There was pervasive weakness in our macro universe this week as 85% of our list closed lower with a median return of -2.17%.
  • The VIX index was the big winner, closing out the week with more than a 30% gain and registering fresh 4-week highs in the process.
  • The biggest loser again this week was Lumber, with another massive weekly loss of -15%
  • Despite the weakness (and something we haven’t said since April), the...

We retired our "Five Bull Market Barometers" in mid-July to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

And at present, markets are a total mess and full of mixed messages as most major stock market indexes continue to churn sideways in consolidation patterns, while many risk-on commodities are in corrective phases.

While the weight of the evidence still remains in the bullish camp, bears seem to add to their list of talking points with every passing week. We believe the highest probability outcome over the coming weeks to...

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

The US Dollar trading at key levels against a significant amount of Developed and Emerging Market currencies is the major theme in Currency Markets right now. 

The GBP/USD is challenging an area of resistance that acted as support for over two decades but has been a barrier for prices since the Brexit vote almost 5 years ago.

The USD/CHF is on the verge of completing a massive 9-year top.

The USD/ZAR just violated critical support at a decade-long trend line.

And USD/CAD is currently attempting to complete a 5-year double top... with a pattern that looks strikingly similar to that of the DXY Index itself.