From the desk of Steven Strazza @Sstrazza

*** Click here to read the reveal post for this Mystery Chart ***

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 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?

This is not something we do often -- usually because these types of opportunities don't present themselves frequently. But we've identified an under-appreciated potential for a 20x gain on our invested capital if the markets cooperate.

Its the perfect storm of a megacap stock emerging from an long base, options flow showing people are starting to position for "something" and an ASC price target that doesn't appear to be priced in by the crowd.

Of course, part of the reason for the elevated options activity is due to an "Investor Day" event happening today, but the action still has been raising some attention.

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

The US Dollar has been trapped in a sideways trading range for the trailing 12 months now. The primary trend is lower, and we continue to see near-term weakness from the DXY Index as well as most USD crosses.

Commodity-centric currencies have been some of the best performers versus the Dollar since early last year, although most of them have been correcting since Q1 or Q2, giving back a good deal of their earlier gains.

So, will we see a resurgence back to those risk-on pairs, or will they keep sliding lower against the Dollar?

Today, we’re going to focus specifically on the currencies of some of the largest oil-producing countries in the world.

This should give us information not just about currency markets, but also commodities and risk assets in general. 

Let’s talk about it.

An easy way to aggregate and measure their performance as a group is by analyzing our Petrocurrency Index. It includes currencies like the Canadian Dollar $CAD, the Russian Ruble $RUB, and the Brazilian Real $BRL, among others.

Here it is, overlaid with Crude Oil...

From the desk of Steve Strazza @sstrazza

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.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny...

From the desk of Steve Strazza @Sstrazza

Welcome to our latest "Minor Leaguers" report.

We've already had some great trades come out of this small-cap-focused column since we launched it late last year and started rotating it with our flagship bottoms-up scan, "Under The Hood."

We recently decided to expand our universe to include some mid-caps….

For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but we think it’s time we branch out a bit and allow some new stocks to find their way onto our list.

The way we’re doing this is simple...

To make the cut for our new Minor Leaguers list, a company must have a market cap between $1 and $4B. And it doesn’t have to be a Russell component--it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe. 

The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order...

If there has been any alpha anywhere in this market, it's been in Crypto.

We don't care where the trends are. We just want to participate in them. They can be in Stocks, Energy, Metals, Euro, Crypto, doesn't matter.

I stopped caring a long time ago.

Here's Cardano reminding us what polarity is all about:

How much longer is this market going to be a mess?

Probably longer than you want it to be.

Why do you think defensive assets stopped going down 5-6 months ago?

It's Saturday Morning Chartoons time. 

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

From the desk of Steve Strazza @sstrazza and Grant Hawkridge @granthawkridge

It’s been a while since we checked in on the US breadth scene, and for a good reason… there’s really nothing new to say.

Some US stocks are going up, but most are not.

Instead, our focus has been on expanding global breadth. We believe the burgeoning participation in international markets is constructive for US markets, specifically for cyclical areas. 

But are we beginning to see any signs of breadth expansion domestically? 

In today’s post, we'll switch gears and turn our attention stateside to address participation among US stocks.

Let’s dive in!

Here’s a look down the cap scale at all three S&P indexes, from large to small:

There's been literally no material move in the number of new...

From the desk of Steve Strazza @Sstrazza and Ian Culley @Ianculley

Industrial metals have been one of the strongest subgroups within the commodity complex over the trailing year. 

The parabolic advance in Steel futures off last year’s lows is an excellent illustration of this.

But lately, we see more and more commodities shift toward sideways trends in the intermediate-term. And lots of them are doing so trapped beneath overhead supply. 

A quick glance at charts like crude oil or copper tells this story well -- the last four months have been a chop fest for most.

Despite an overall trendless market, we’ve seen pockets of strength from a diverse array of contracts. Steel isn’t the only one. In recent months, we’ve covered breakouts in Coffee, Sugar,...

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Thanks to everyone who participated in last week’s Mystery Chart.

We questioned whether this consolidation would resolve in the direction of the primary downtrend--in which case we would expect a break lower.

Or maybe buyers would step in and defend those former lows once again.

Despite the lack of bearish momentum readings, many of you wanted to sell on a break below support, citing the primary trend as a major deciding factor.

And that's basically where our heads were, too, as it's always easier to go with the trend.

So what are we selling? Or should I say... buying?

The chart was the Small-Cap Technology ETF $PSCT… but it was inverted!

So those who wanted to sell on a breakdown were actually buyers, and vice versa.

Here’s a fresh look at the chart, right side up this time:

...

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridg

Money really likes to flow where it's treated the best… and as far as sectors and even most industry groups go, there simply isn't much alpha out there at the moment.

In analyzing relative trends, we’re always aware of how the overall stock market is performing against defensive assets. 

In today’s post, we’re going to check in on those sectors investors pile into when seeking safety as opposed to positioning for risk.

Utilities, Real Estate, and Staples... the “bond proxy” groups. Let's dive in.

Here's a custom index of them all charted relative to the broader market.

Notice how the relationship has stopped trending lower since it bottomed back in July.

While many of these defensive groups had been in freefall versus the S&P, as JC discussed in this month's conference call, it’s interesting to see them trying to build out...