From the Desk of Ian Culley @IanCulley

We have the smartest clients!

We might not always agree on the market direction at All Star Charts, but we all share that sentiment. 

Our readers ask the best questions. And I selfishly benefit every time as it forces me to clarify my thoughts into a coherent response.

As I answered an email last night, I realized I had to share it with everyone:

We're almost half way through the 3rd quarter already!

Boy does time fly when you're having fun.

Have you noticed how much different the 2nd half of the year looks compared to the first half?

We're thrilled to see it.

Owning Tech stocks stuck below overhead supply is no way to go through life.

Here is the Market-cap Weighted Technology Index failing miserably to break out above its former cycle peak.

And, of course, the Equally-weighted Technology Index failing altogether to even retest its former highs:

From the Desk of Ian Culley @IanCulley

The US Dollar Index $DXY is the most important chart in the world, again.

But, honestly, when is it not?

There’s no hiding from King Dollar.

It’s true: Currencies are not considered one of the three major asset classes (bonds, stocks, and commodities).

Nevertheless, fluctuations in the US dollar impact every asset worldwide – especially stocks and commodities. 

And the probability of renewed headwinds for risk assets is increasing as the failed breakdown in the dollar could have legs…

Check out the triple-pane chart of the DXY, our G-10 currency index, and the US dollar advance-decline line:

Our US dollar A-D line went from failing to confirm the DXY breakdown last month to posting new multi-year highs this week.

To be clear, the...

We held our August Monthly Strategy Session Wednesday night. 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.

This is just a friendly reminder that the most bullish period of the entire 4-year cycle has just come to an end.

How'd you do?

Stocks broke records in terms of performance and have been in the midst of a raging bull market, driven by sector rotation and breadth expansion.

All of this is perfectly normal.

Stocks did very well at exactly the time that they were supposed to.

Not sure why so many are surprised by it.

Now that even the biggest permabears threw in the towel and started turning more optimistic, we are now entering the most bearish time for stocks:

This is the video recording of our August 2nd Monthly Charts Live Strategy Session

From the Desk of Ian Culley @IanCulley

Time seems to move faster during bull markets.

I have my theories, and they all revolve around having fun.

One thing is certain: The month of July is now behind us. 

I can’t believe we’re more than halfway through the year and a month into Q3!

Since it’s August 1, let’s keep the good time rolling by reviewing the most important monthly chart in the deck…

It's the US Dollar Index $DXY.

The US dollar acted as a Chief Headwind for Global Risk Assets last year, with a little help from the Fed.

All eyes are fixated on King Dollar as it straddles an area of former-resistance-turned-support:

DXY broke down to fresh 52-week lows last month, only to almost immediately turn higher. The long lower shadow on the monthly candle highlights the reversal, indicating an...

The Dow Jones Industrial Average and Dow Jones Transportation Average are both hitting new 52-week highs.

These are things we see regularly in uptrends. Not so much in downtrends:

From the Desk of Ian Culley @IanCulley

The US dollar isn’t going down without a fight.

Investors weren’t given much time to celebrate the breakdown as it quickly turned into a potential failed breakdown. 

Before we get ahead of ourselves, it could simply turn into a hard retest.

It happens all the time.

So let’s check the charts…

The US Dollar Index $DXY is trading back above a critical shelf of former lows:

As long as it’s above that level – let’s call it 101 – the odds of a failed move increase.

On the other hand, price could chop sideways for longer than anyone cares to believe.

It’s a real possibility, especially when zooming out on the daily chart:

...

Monday night, we held our July Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize the call by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get into it!

From the Desk of Ian Culley @IanCulley

The US Dollar Index’s $DXY break toward fresh lows resembles a defiant crawl more than an earnest march.

An image of dragging my children away from the toy aisle flashes across my mind.

(Actually, I let them walk around the store with their toy of choice. And then, we ditch the item before checkout after a couple rounds of negotiations. It works quite well – no screaming involved.) 

But while the DXY drags its feet, the individual currencies that comprise the index are picking up the pace. 

The Swiss franc is ripping. The euro is posting fresh 52-week highs. And the British pound is hitting our upside objective.

Our initial target for the pound marks a logical level of resistance.

But since the Dollar Index broke down less than a week ago, could the pound slice through this...

This is the video recording of the July 2023 Mid-month Conference Call.