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.

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

Procyclical commodities have attracted all the attention this year as inflation and rising rates have driven prices considerably higher.

But, as we pointed out last week, many of these contracts -- Brent crude, natural gas, copper -- are running into areas of overhead supply or are already in the process of correcting.

With that as our backdrop, let’s switch gears and focus on an area of the commodity space we haven’t talked about in months.

That’s right... precious metals!

While we’re seeing many leading commodities pause at logical levels of resistance, gold and silver have finally stopped going down and are rebounding off support. Despite trending lower since last summer, they're still holding above the lower bounds of their trading ranges. We think this basket of shiny rocks is ripe for review.

Let’s take a look around the precious metals complex and see what’s new.

First, we have a chart of gold futures:

From the desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 50 largest US-listed international stocks, or ADRs.

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 50 largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

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 Grant Hawkridge @granthawkridge

While breadth has improved in recent weeks and months, the bulls still have their work cut out for them.

When we consider all our breadth indicators in aggregate, the evidence remains mixed. What else is new!?  It’s been that way for the majority of this year.

Many of the major indexes made new all-time highs this week. Meanwhile, some advance-decline lines are moving higher, but others are moving lower. Some are at the top of their range, but others are at the bottom of theirs.

The advance-decline line measures stock market breadth based on cumulative net advances. In other words, it takes the number of advancing stocks on a given day and subtracts the number of declining stocks. That number is then added to the previous day’s value, creating a cumulative advance-decline line.

A/D line divergences occur when price is making new highs and the A/D line is NOT.

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

Long-term interest rates have taken a hit this week, while the short end of the curve has continued higher. When we zoom out a bit, yields have been rising across the curve since this summer.

During the past few months, the 2-year yield has ticked higher by more than 30 basis points (bps), the 5-year has increased by almost 60 bps, and the 10-year has gained 40 bps. But when we look all the way out to the 30-year, it's only risen by roughly 20 basis points.

Rates are rallying across the board, Treasuries are trending lower, and bond market investors are favoring TIPS and higher-yielding securities.

How do we want to position ourselves in this kind of environment?

Well, we definitely don’t want to be buying Treasury bonds.

In today’s post, we’re going to take a trip around the fixed-income market and discuss some US Treasury funds we can use as vehicles to express our thesis.

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 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?

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

We use a wide variety of bottom-up tools and scans to complement our top-down approach. This makes it near impossible for us to miss out on favorable trading opportunities.

One way we do 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 Steven Strazza @Sstrazza and Ian Culley @IanCulley

Crude oil has stolen the show, as it’s up more than 28% from its August lows.

What started as a questionable breakout has turned into a full-fledged rally -- and the broader market seems to agree.

Copper retested its all-time highs last week, interest rates are on the rise across the curve, and cyclical stocks have become leaders.

All of these events fit neatly in an environment where crude oil prices continue higher.

But what does the currency market have to say about the recent strength from black gold?

Let’s look at our Petrocurrency Index for clues, along with one forex pair that's showing strength against the US dollar.

First, we have our Petrocurrency Index overlaid with crude oil futures:

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 began rotating it with our flagship bottom-up scan “Under The Hood” earlier this year.

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…

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.

Looking For Confirmation

Many markets and major indexes have pressed back to their year-to-date highs in recent weeks. How price reacts at these natural levels of overhead supply will be the next key piece of information we have. We’ve already seen a handful of leadership groups like Financials and Energy reclaim these resistance zones. Meanwhile, many major indexes like the S&P rallied back to their highs last week and paused. One thing worth noting is that momentum has been waning and making lower highs despite the higher highs from price since April. An overbought RSI-14 reading would go a long way in confirming new highs at the index level.

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.