From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley.

We held our May Monthly Strategy Session Monday night which Premium Members can access and rewatch here.

For these calls, we really take a step back and put things in the context of their structural trends by focusing only on Monthly charts. This is easily one of our most valuable exercises.

In this post, we’ll provide a summary of the call by highlighting three of the most important charts and topics we covered along with commentary on each.

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

The first step in approaching any market is to identify the primary trend.

Is price going up, down, or sideways? Simple!

But it's easy to lose sight of the long-term trend sometimes, especially if you don't zoom out enough. This is why our process of looking at monthly candlesticks is so important. It literally forces us to take a step back and focus on the structural trends at play.

And that’s exactly what we did in this week’s Currency Report. When looking through all of our monthly charts, the big picture view of the US Dollar / Swiss Franc pair really stood out. We're going to discuss it in today's post.                                          

This is the video recording of our May 3, 2021 Monthly Charts Live Strategy Session

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.

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

A growing number of domestic and international markets are running into key levels of interest. 

This is a theme we’ve discussed at length over the past six weeks. We've also discussed how we see similar developments in the Commodities and Fixed Income markets.

With this as our backdrop, are you surprised that we're also seeing similar action in the Forex markets right now? 

We aren’t! 

In this post, we'll highlight two traditional risk-on currency pairs, both of which are trading at critical inflection points. 

Let's dive right in.

First up is the AUD/JPY cross. This FX cross is the classic risk-on/risk-off gauge within the currency markets -- and since last November, it has been sending a clear message of “risk-on!”

From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance 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.

The weight of the evidence still suggests it's prudent to be a buyer, not a seller, of risk assets for more meaningful time horizons.

Shorter-term, the market looks increasingly messy. For the first time in over a year, defensive assets are beginning to stabilize at logical levels of support, while stocks and major risk groups achieve our upside targets. Even a handful of some key Intermarket ratios are potentially diverging from the broader averages.

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

Last week, we highlighted the USD testing a critical level against the Rand. This is a theme we've been seeing a lot in a variety of USD crosses recently and will discuss more in a post later this week.

We’re finally beginning to see some resolutions from these key levels, and they're revealing some very valuable information regarding the Dollar’s strength and the likely future direction for the $DXY Index itself.

In this post, we'll take a look at some examples of this theme by showcasing two forex pairs from Northern Europe that are currently breaking down at major inflection points against the USD.

But before diving in, let's set the stage a bit...

What are some of the major developments in G-10 pairs that are driving the US Dollar Index right now?

This is the video recording of the April 2021 Conference Call.

From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance 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.

The same themes that we've been pounding the table on more or less continue to drive primary trends.

In recent weeks, we've seen some rotation back into Large and Mega-Caps, which has propelled the major indices to new highs, while SMIDs are still resiliently consolidating. While the list of negative data points has grown, it's still not close to anything that warrants concern.

Last night I popped into BNN Bloomberg to talk about what's going on in the market.

We're seeing new highs across a lot of major indexes, but what's happening underneath the surface?

We've been seeing the price of lumber soaring along with things like Steel and Rebar futures. It's the whole demand/building/growth theme that continues to stand out.

One thing that's definitely worth watching is the All Country World Index Ex-U.S., which is basically a snapshot of what the rest of the world looks like. And you'll notice that the index ETF $ACWX is stuck right between its 2008 highs and 2018 highs.

This puts the global stock market in quite a predicament. If you're bullish equities, you're going to want to see a breakout through those historic 2008 highs. If you're bearish equities, this is one you want to see break back below those 2018 highs.

Check out the video in full. This was fun:

Several areas of the market have reached key levels of support or resistance. 

Crude Oil continues to digest recent gains just below overhead supply near its former 2019 highs. 

The Euro/Dollar is finding support at the recently violated 12-year downtrend line. 

And the Emerging Markets ETF $EEM continues to consolidate near its 2007 highs.

Meanwhile, the US Dollar is also testing key levels. 

USD strength has become a major market theme over the last couple of months -- along with the potential effects it could have on global risk assets. A strong US Dollar could apply pressure to Emerging Markets, Commodities, and cyclical assets in general. This would challenge the global growth thesis and the rotation into cyclical areas we have seen play out over recent months.

In a market environment where Financials and Natural Resources have become leadership groups, how do we not have a conversation about Canada? Taking that one step further, we need to talk about how any investor, whether living in Canada or not, can take advantage of a potential structural swing in the trend for Canadian Equities.