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.

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.

From the Desk of Ian Culley @IanCulley

Random discovery, buying cheap, and riding the wave…

According to long-time gold mining investor Tommy Humphreys, these are three ways to score outsized returns in the junior mining space.

I’ll admit the first two strategies are foreign to me. But I can get behind riding a wave, especially when it jibes with a trend-following mentality.

Check out Tommy’s favorite gold mining stock, or "story," as he puts it…

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the two weeks ended April 26, 2024. This report is published bi-weekly, in rotation with The Minor Leaguers.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names.

There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

From the Desk of Steve Strazza @Sstrazza

Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That's why we're turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we're curating a list of stocks that have raised their payouts every year for five to nine years.

We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money." Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

From the Desk of Ian Culley @IanCulley

Natural gas futures are due for a pop.

It might sound silly as the widow-maker is falling back toward its mid-1990s lows.

But this is a logical level to witness a sustained rally. Especially when you consider previous cycles and where Natural Gas is trading relative to crude…

Earlier this week, JC mentioned the crude oil vs. natural gas ratio during an internal strategy session.

He tracked this relationship when he day-traded natty gas, using it as a mean reversion indicator.

Fast-forward to today, and the crude-to-natural-gas ratio is retreating from its highest level in more than a decade.

The last time the ratio hit these levels, natural gas futures ripped 225% in less than two years. 

From the desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.

We've also sprinkled in some of the largest ADRs from countries that did not make the market cap cut. 

These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.

It's got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.

The beauty of these scans is really in their simplicity.

We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness.

Let's dive in and take a look at some of the most important stocks from around the world.

Here's this week's list:

From the Desk of Ian Culley @IanCulley

Goldielocks’s soft landing is proving sticky.

Commodities are outperforming stocks and bonds. Interest rates are rising worldwide, and investors are anticipating increased inflationary pressures—not multiple rate cuts—this year.

In fact, inflation expectations are reaching levels not seen since June 2022…

Check out the Treasury Inflation-Protected Securities ETF $TIP vs. the nominal US Treasury Bond ETF $IEF ratio zoomed out twenty years:

Monster base. But I don’t think of this ratio in those terms. Instead, I use it to gauge investors’ desire for inflation protection. 

From the Desk of Steve Strazza @Sstrazza

Welcome to The Junior International Hall of Famers.

With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US-listed international stocks, or ADRs.

This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.

Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

Let's dive right in and check out what these future big boys are up to.

This is our Junior International Hall of Famers list:

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As most of you know, we use various bottom-up tools and scans to complement our top-down approach.

It's really been working for us!

One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn't just end there.

We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.