The Strazza Letter Articles

Two weeks ago, I wrote about the breakout that was brewing in silver. 

And it wasn’t just about the price action in gold.

There were finally other signals emerging and suggesting higher prices for the precious metal. We just needed to see if those trends had legs. 

The silver/gold ratio is everything when it comes to risk appetite. It’s the oldest intermarket indicator in the world of commodities. Here’s what I said about it:

“If I end up being right about silver, we’re going to see the silver/gold ratio fail this breakdown and scoop higher”.

The writing was already on the wall for an epic bear trap, and this week it fired. 

The silver/gold ratio just had one of its best weeks in history and failed this topping pattern with authority. 

The analyst team is serving up all kinds of scans these days. Technical scans, fundamental scans, sentiment scans, a little bit of everything. These guys are really having a blast. 

But they are just trying to make the most out of this bull market. They know how this works.

So, we’ve been scanning for speculative growth, international leadership, mega trends, rotation extremes, fading analysts and short-sellers,… we’ve even been running scans on warrants.

We’re going to keep sharing more and more of them each week.

But the scan of the week has to be the Matt Warder-inspired Metals, Mining & Minerals Leaderboard.

Matt has become a dear friend of All Star Charts over the years and was just with us a few weeks ago out in New Orleans. We are truly blessed as Matt has some of the deepest knowledge of natural resource stocks of anyone in the business, with a focus on minerals. 

When he came on the Morning Show the other day, he dropped as much alpha in 30 minutes as any guest ever has. We must...

From the desk of Steve Strazza

Have you ever heard of the Nokkie-Stokkie?

It’s forex trader lingo for the Norwegian Krone/Swedish Krona… and right now this obscure cross is setting up for a classic failed breakdown.

After undercutting key support in early May, it’s snapping back toward this level now. And with each passing day, it’s looking more and more like a bear trap.

We’re not just writing about this unheard-of FX pair to amuse you. Believe it or not, the currency pair carries valuable insights.

It’s one of our most trusted intermarket energy whisperers.

So it's no surprise the scoop-n-score setup in the NOK/SEK looks almost identical to the one in Crude Oil Futures:

Crude is working on its own bear trap — carving out a tactical reversal pattern just below a shelf of former support.

...

The way I learned it is that gold moves first. 

And then copper. 

And finally crude oil. 

That’s the intermarket theory and order I’m familiar with for commodities. 

Jason and the guys at Gold Rush do a great job of covering intermarket relationships and what they all mean. 

They’ve been all over these commodity trends all year. Some have been great, like gold. Others are messy, like copper. And some downright bad, like crude. It’s been a mixed bag to say the least. 

But today, all the buzz is about silver. It’s having its best day of the year as it rips higher out of a bull flag. 

Our volatility squeeze indicator suggests a big move is brewing, and there is plenty of runway considering the pattern hasn’t even broken out yet. 35.25...

One thing I’m looking to do more of here at ASC is share some of the scans we’re running internally each week.

Our roots are in top down technical analysis. We do it better than anyone. And we share a lot of it, but we don’t share enough.

We’re literally running hundreds of ad-hoc scans each week. And we’re going to start giving one away every weekend.

This one is a clear and simple leadership scan, which is why I like it so much. This is the textbook top down approach. It doesn’t get any better.

We start with the best sectors, drill into the best subgroups, pick one, and then find the top stocks.

This week, Industrials stand out as a clear leader—second only to Tech, up nearly 9% in May, and the first sector to complete the V-shaped recovery and retest all-time highs.

Within Industrials, the...

One of the things I love most about bull markets is how they try to include everyone.

Everyone is making money. 

Whether it’s growth stocks or value stocks. US stocks or international stocks. Gold or bitcoin. 

It’s all working and we’re all happy. The parties are better. You get the picture. 

And the reason this is true is because most risk assets participate in bull markets. 

Even the bad ones join the party eventually. 

And of course, we can always find bad stocks that are bucking the trend and falling, but I’m talking about subgroups and thematics. Most areas end up working.

At the end of a sustained bull market, the list of groups that didn’t go up will be very short. 

It’s a hallmark characteristic of the good times....

I have to admit I’ve been thinking a lot about bonds lately. 

Like way more than usual. 

It’s because I think this is a critical time and place for treasuries. 

The 30-year US yield $TYX is backing off after testing its cycle highs. Meanwhile, the popular iShares long-term treasury fund $TLT is rebounding off a big shelf of support. 

If these key levels break— so TLT to the downside and TYX to the upside— we’re talking about major pattern resolutions. 

Major pattern resolutions tend to be followed by significant reaction legs. 

What I’m saying is bonds are at risk of tanking lower if this scenario were to play out. 

And have you noticed how stocks have felt about bond market volatility lately?

I’ve overlaid ARKK with the inverted MOVE index to answer that...

I’m watching the sun sink into the gulf of whatever water from my mobile office. 

We’ve done the drive from Key West to Naples a bunch lately and it’s just lovely. 

No major highways. You take a road from the middle of the ocean to another through the middle of the Everglades. 

It is cruising, defined. Florida style. 

You can see both sharks and gators right out your window along the way. 

Anyway, I’ve found that I really enjoy reading and writing from the car. It frees me from my desk-brain. 

I also really enjoy uncorrelated exposure. It frees me from my overweight risk-on equity positioning.

And I don’t mean defensive exposure. 

I’m talking about exposure to things that can move fast and generate alpha in bull cycles but don’t necessarily move with the broader US...

For traders, being early is just as bad as being wrong. 

And I’ve been early on energy. There’s no doubt. 

We’ve taken some shots with call options and they haven’t worked. 

But I’m also building and increasing long-term positions in the traditional oil & gas space. Nothing fancy. I’m talking about the largest integrated players around the globe. 

Exxon, Chevron, Canadian Natural, Petrobras… I’m leaning into the big boys in my long-term account. How about those dividend yields?

And the data keeps telling me I’m on the right track. 

Pull up a price chart and tell me I’m crazy. Because you’d be right. 

Energy bulls are trying to catch a falling knife right now. That’s a top in crude for the time being…

However, my technical upbringing has me focused on other things. I’m a...

Stocks gave some back this week, but when I look beneath the surface, I really like what I see from market internals.

Quantum stocks are red hot again. 

Space & exploration names are perking up. 

The new nuclears are having a monster week. 

Heavily shorted stocks are squeezing.

And let’s not forget the cryptos. How about those new highs in Bitcoin!?

Speculative growth and technology continue to lead and have been doing it consistently since the April lows.

Participation is broadening, and a growing list of risk-on stocks are assuming new leadership roles.

It’s all very bullish, and we want to stay overweight offense as long as this is the environment.

So today, we updated our Speculative Growth Leadership Scan that we shared ...

I’ve been on an absolute tear this year. 

With the Breakout Multiplier strategy, I’ve had at least one 10X winner each and every month.

I’ve been looking through our recent trades and journaling on them, which is something I do every couple of weeks. 

I thought I’d share my findings and review how these outlier trades played out. Let’s start from the beginning.

I started the year with one of our favorite stocks—$HIMS.

Price was coiling, momentum was building, and I pounced at the end of January.

I bought the Mar 21st $40 calls. They doubled in 8 days and eventually ran for +1727%.

I don’t know much about Peru, outside of the fact that they make some great ceviche.

But I’ve been thinking about the country a lot today.

MSCI Peru $EPU was on a short list of international ETFs that made new highs today.

At first, I was puzzled by this. It was a sea of red out there. Everything got hit. Not just in the US, but across the globe. 

Then I looked at the funds holdings and realized how it happened. EPU is basically a big basket of metals stocks. 50% of the fund is invested in materials. 

Here it is resolving higher from a multi-year base:

Gold and silver miners were the only stocks that worked today. Both of the shiny metals look fantastic, and I think silver is just breaking out now. 

EPU’s exposure to...