From the Desk of Ian Culley @IanCulley

The US Dollar Index $DXY is chopping smack-dab in the middle of a three-week range.

Currency markets are quiet. The euro, the pound, and the yen have all dialed back the volatility.

But there’s nothing wrong with the sideways action.

And in no way does it diminish the underlying uptrend for the dollar. 

In fact, the near-term trendless range makes sense in light of DXY’s recent run and the long-term support levels in play for major currencies.

Check out the DXY with the number of consecutive up weeks in the lower pane: 

Eleven weeks in a row! The index climbed higher for almost three straight months. 

A period of consolidation not only makes sense but politely adheres to the law of gravity.

From the Desk of Ian Culley @IanCulley

Buyers drove home their precious metals stance for a second week.

Gold and silver posted wide-bodied bars, rocketing higher on the open and closing near the day’s peaks. 

Bullish momentum thrusts like these tend to spark sustained rallies.

That's right!

It could be off to the races for these shiny rocks, especially given the crucial levels recovered last Friday...

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended October 14, 2023. This report is published bi-weekly and rotated 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 and Alfonso Depablos @Alfcharts

This is one of our favorite bottom-up scans: Follow the Flow.

In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.

Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

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

Price must hold above key support levels when defining a range or uptrend.

It might sound simple. Yet investors often sideline these crucial levels in favor of the latest headline.

I read the news daily and support journalists fighting the good fight. However, I don’t incorporate what I read in the papers into my market analysis. 

Instead, I focus on price and the critical areas seared into the collective memory bank – support and resistance.

Perhaps you can guess my response when a reader recently asked, “What will it take for crude oil to break down?”

Price must undercut support!

Check out the daily crude oil chart:

From the Desk of Ian Culley @IanCulley

Price doesn’t move in a straight line.

Just don’t tell the US dollar, which has managed to post positive gains for 11 straight weeks. 

But the US Dollar Index $DXY is sporting its deepest drawdown since mid-July – a mere 0.2% – as buyers catch their breath.

Five down days and counting have my attention, though it doesn’t shift my bullish bias for King Dollar.

Not yet!

Check out last week’s DXY candle:

Buyers drove prices higher over the course of last week only to succumb to selling pressure by Friday’s close. 

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As many of you know, something we've been working on internally is using 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.

From the Desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

This is one of our favorite bottom-up scans: Follow the Flow.

In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.

Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

From the Desk of Ian Culley @IanCulley

One day of buying pressure doesn’t change the situation with precious metals. 

Gold bugs were out in full force Friday, driving gold and silver to impressive gains that would excite even the least devout among them.

But don’t get your hopes up… 

Precious metals stopped falling at a logical level of support.

Good, old-fashioned price memory triggered a standard response – nothing magical.

More importantly, nothing bullish.

From the Desk of Ian Culley @IanCulley

Each commodity market has unique supply and demand dynamics.

The result is a diverse set of assets offering a steady flow of trading opportunities.

Today, I’ll outline two promising trade setups – one long, one short.

Let’s start with a fan favorite…

Natty Gas!

Natural gas futures gained over 6% on Thursday, taking out a key pivot high.

Here’s the continuation chart posting its highest level since March:

Notice natty gas is finding support above a former resistance zone at roughly 2.835. 

On Wednesday’s "What the FICC?" I mentioned trading against Tuesday’s low based on this near-term support.

Price has ripped higher since, taking out a shelf of pivot highs and filling a downside gap from early September.