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

King Dollar is reasserting its reign at the expense of major global currencies and risk assets.

What started as a potential failed breakout last month is proving no more than a hard retest, as the US Dollar Index $DXY broke to fresh 20-year highs yesterday.

Even the most resilient currencies, such as the Canadian and Australian dollars and the Mexican peso, are losing ground against a surging USD.

As we’ve pointed out, this is not an ideal scenario for risk assets – particularly stocks.

Yesterday’s price action was a great example – dollar up, stocks down. 

This is not a coincidence.

Let's zoom out and analyze the dollar’s recent strength and then discuss what it means for these other asset classes.

Here’s a daily chart of the US Dollar Index:

The largest insider buy on today’s list is a Form 4 filing by David Goeddel, independent director at NGM Biopharmaceuticals $NGM.

Goeddel disclosed the purchase of approximately $13.2 million worth of shares in the small-cap biotech company.

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.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest Under the Hood column where we'll cover all the action for the week ended June 10, 2022. This report is published bi-weekly and rotated with our Minor Leaguers column.

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

Our Top 10 Charts 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.

Yen Leads Rates Higher

The Japanese yen has been front and center, and for good reason. It won’t stop falling. Notice the strong relationship between the USD/JPY cross and the US 10-year yield illustrated in the overlay chart with a 26-day correlation study in the lower pane. Interestingly, this strong positive correlation all centers around the Bank of Japan’s effort to put a cap on interest rates. They achieve this by going into the open market to purchase Japanese Government bonds. As such, the BOJ has to reduce US Treasury purchases, and this is putting upward pressure on the US 10-year yield. As long as this remains their strategy, the strong relationship between these markets should hold.

From the desk of Steve Strazza @Sstrazza

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 big picture context 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.

Macro Universe:

Today’s Hot List is a short one.

The CEOs of Nerdy $NRDY and SoFi Technologies $SOFI both filed Form 4s reporting small purchases of their own stock.

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 Steven Strazza @Sstrazza and Ian Culley @Ianculley

Don’t fight trends. It never ends well.

Learning to go with the flow often comes with age and experience. Lucky for us, we have plenty of both at All Star Charts as the current cycle isn’t our first rodeo.

We’ve been pounding the table on the energy trade, gracefully accepting all of this inflation and the outrageous prices at the pump.

What can we do about it? 

We can own the strongest commodities that continue to benefit from this inflationary environment. It’s really that simple. 

Let’s take a look at one of them now.

Here’s a zoomed-out chart of live cattle futures:

Cathie Wood’s infamous ARK Investment Management is on our list today, as it just added more than 1 million shares of biotech stock Twist Bioscience $TWST.

The latest 13G reports an ownership interest of more than 11% in the synthetic DNA specialist.

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

The Japanese yen continues to be front and center, as the safe-haven currency can't seem to find its footing.

In a market where risk assets are struggling to catch any sort of sustained bid, finding investment opportunities in yen has been a great strategy. It continues to work.

Long USD/JPY has been one of the best trades on the sheets this year – by far! And it looks to be continuing its upward trajectory, as it hit fresh 20-year highs earlier this week.

Aside from providing a stellar trading opportunity, the current intermarket relationship between this forex cross and the bond market may reveal the near-term direction of the US 10-year yield.

Let’s take a look.

Here’s an overlay chart of the USD/JPY pair and the US 10-year yield with a 26-day correlation study in the lower pane:

The largest insider buy on today's list is a Form 4 filing by James A. Star, independent director at Chewy $CHWY.

Star disclosed the purchase of approximately $5 million worth of shares in the online pet retailer.