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
Check out our latest Mystery Chart!
What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.
This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.
It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!
The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.
While you can try to guess the chart, the point is to make a decision…
So let us know what it is… Buy, Sell, or Do Nothing?
In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."
We write a post every other week where we outline some of our favorite setups from this universe of stocks.
We've already had some great trades come out of this column and couldn't be happier about the early feedback.
Moving forward, we'll be rotating this column with "Under The Hood" each week.
Ultimately, to make the cut for our Minor Leagues list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort the stocks by their percentage from new highs. Easy done.
Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
The Growth Vs Value Cheat Code
We’ve pounded the table about that 1.70 level being the line in the sand for the relative trend in Growth vs Value. If we’re below there - which we believe we’re likely to remain, then we want to continue to be overweight Value and cyclicals. If the ratio decisively reclaims this level then we’ll have to rethink our entire thesis, along with that of a new Commodities Supercycle. But, that’s not the bet we’re making at all.
From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley
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.
As many of you know, we run A LOT of scans here at All Star Charts. In fact, I gave a presentation about them this past weekend at Chart Summit which you can rewatch here.
In this post, we're going to share a free trade idea from our Young Aristocrats list which is one of my absolute favorites of all the various bottoms-up scans I regularly run.
The rationale behind the list and corresponding monthly column is to catch strong stocks when they are still in the early stages of their dividend growth phase* in hopes that by doing so, we'll be buying some of the future Dividend Aristocrats...
From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley
Pockets of strength are once again emerging within the Commodity space.
We pointed out that both the CRB Index and the ASC EW33 Commodity Index were breaking above key resistance levels, pointing to a burgeoning upside move last week.
That upside move has now materialized!
We saw Industrial Metals -- including Copper, Steel, and Aluminum -- continue to follow-through as they grind higher.
But this week’s biggest moves came from the Agricultural Commodities.
Let’s take a look at the recent strength in Ags using our custom ASC Equally-weighted Agriculture Index.
From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @GrantHawkridge
The credit market is overflowing with information.
We haven’t discussed it too much lately… but that doesn’t mean we aren’t paying close attention.
It would be foolish to overlook it. After all, they call Bond traders the “smart money” for a reason... Right?
We’ve recently discussed the theme and likely implications of how so many major stock market indexes - in both the US and abroad, are hitting very logical levels of overhead supply right now.
We think it’s no coincidence that all of this is occurring at the same time. And you’ll never guess what else…
We’re also seeing this very same behavior from some of the most important Bond Market ratios we track, as many are currently running into crucial inflection points.
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 varietyof 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 downat 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 weekend was the 5th Annual Chart Summit. It was a blast (as always) and all the footage will be archived and available for anyone to rewatch soon!
My presentation this weekend was about all the various "bottoms-up" scans we run here at All Star Charts... including Under The Hood, of course.
Therefore, I wanted to spice things up for viewers and share some additional names outside of the usual bi-weekly report.
So I summarized two bonussetups during the conference (which you can watch in the videos, available soon) and I'll outline them again below.
Let's dive right in.
* Bonus Long Setups From Chart Summit Presentation *
