From the Desk of Ian Culley @Ianculley

Don’t take your eyes off the US dollar and interest rates!

I know it’s been a long year, but we’re finally witnessing early signs of potential trend reversals. The breakdown in the dollar last week confirmed the mounting evidence suggesting the USD has reached its peak.

Now, will interest rates follow?

Check out the dual pane chart of the US dollar index $DXY and the 30-year yield $TYX:

They look almost identical. The recent breakdown in the dollar marks the lone flaw between the two, raising the question…

Will the strong relationship between rates and the dollar hold?

This week we came right out of the gates with the Chart of the Decade.

The catalyst for stocks to have a sustained rally is a weaker US Dollar.

The market keeps proving that to be right.

And yes, I am aware that in the 1990s, a weaker Dollar was not the bullish catalyst for stocks.

But are you aware that this is not the 1990s?

It's 2022 and the correlation has been consistently negative between stocks and Dollars.

Until that changes, we're not going to fight it.

And while this week's chart was comparing the US Dollar to Emerging Market Currencies, in this post I want to focus on the more developed countries.

The Euro, British Pound and Yen represent 83% of the entire US Dollar Index.

The Euro and British Pounds both bottomed in late September, while the Yen put in its low last month.

These are the registration details for our live mid-month conference call for Premium Members of All Star Charts.

Our next Live Call will be held on Monday November 21st at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday night:

If you're still asking what it will take to spark a sustained rally in equities, it's only because you're not paying attention.

How is it not the US Dollar?

Find me a stronger negative correlation with equities over the past half decade or so.

Todays chart focuses more specifically on the performance of US Dollars relative to Emerging Market Currencies.

Notice how whenever the Dollar goes down, stocks absolutely love it:

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.

So we were talking about a guy who's apparently subsisting only on McDonald's patties for the next 30 days. Just the patty --- no bun, no condiments, no lettuce. He's trying to prove some kind of point that it's not McDonald's burgers that are unhealthy, it's everything else in a typical American's McDonald's order at the drive-thru window.

Ok. Whatever.

But all this "healthy McDonald's" talk got us thinking about the even healthier looking chart of its stock $MCD in recent weeks:

From the Desk of Louis Sykes

The collapse of the FTX exchange has been a significant catalyst for market participants to utilize one of Bitcoin's greatest value propositions -- self-custody.

Self-custody is when only you have possession of your digital funds because you control the private key. There's no question; there's no alternative to holding your crypto other than in private cold storage.

Owning your Bitcoin keys voids the necessity for a financial intermediary, completely removing any and all counterparty risk. This is especially important given that crypto exchanges hold a shaky history of being responsible stewards of clients' funds.

When you hold your crypto in hot wallets managed by intermediaries like exchanges, they have all the control. They can freeze your transactions, block withdrawals, set limits on the amount you can transact -- and, in the case of FTX, use your funds for their private self-interest.

We're seeing a massive migration where market participants are waking to the value of self-custody.

From the Desk of Ian Culley @IanCulley

The dollar experienced significant volatility last week, posting its largest single-day loss since 2015.

As far as we’re concerned, the dollar is done. The weight of the evidence strongly suggests its best days are behind it. But that doesn’t mean it’s straight down from here for the US Dollar Index $DXY.

Instead, we expect plenty more volatility in the coming weeks and months. And when we look beneath the surface of the DXY, we’re at a logical level for the dollar to catch a breather.

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended November 14, 2022. This report is published bi-weekly and rotated with our 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.

Is there anything more important than the US Dollar?

They keep fighting me on it, but the market keeps proving them wrong.

It's the Dollar stupid!