From the desk of Willie Delwiche.

Key Takeaways:

• Inflation pressures surge and market is looking for more
• Bonds pricing in rate hikes but real yields remain buried in negative territory
• Gold finally taking a shine to favorable fundamentals as price action improves

Fed Chair Powell has referred favorably to the Trimmed Mean PCE Price Index, published by the Dallas Fed, as a gauge of inflation that does a good job of tuning out noise and distilling the trend. Looking at this index, there have been a couple periods over the past decade when price pressures softened and inflation unexpectedly fell short of the Fed’s 2% goal. Even still, inflation bottomed in the immediate wake of the Great Recession and has been trending higher since. In the months prior to COVID, the Fed was hitting its inflation goal and the 12-month change in this index was edging up to its highest level in over a decade. Inflation has intensified over the...

There's been some notable volatility over the last 24 hours, with Bitcoin and Ethereum losing 8% and 10% respectively over this period.

Throughout this recent selling, over $840 million worth of positions have been liquidated.

We want to emphasize that Bitcoin is still in its sideways range, and we haven't seen a decisive breakdown. As we outlined in yesterday's note, looking out longer timeframes, this merely seems like a springboard to further upside.

If Bitcoin is above 58,000, we need to continue giving the bulls the benefit of the doubt.

If on the other hand Bitcoin loses these lows, then a more defensive approach is likely better.

For those with longer timeframes, a potential retest of 53,000 would provide an excellent level to add to long-term spot positions, if we even get there (not the bet we're making).

As we make our way through the earlier stages of the most bullish time of the year, who better to talk to than Jeff Hirsch, Author of the annual Stock Trader's Almanac.

When it comes to Technical Analysis, what we're doing is analyzing the behavior of the market, and therefore market participants. Seasonality falls under that umbrella and Jeff Hirsch is the ultimate authority on the subject. He's had a front row seat his entire life to how markets trend during different times of the year.

In this episode, we talk about "The Best 6 months", the 4-year Presidential Cycle, Commodities Seasonality, and we even get to learn a little more about his father Yale Hirsch, the originator of the Almanac back in the 1960s.

Jeff Hirsch and I have known each other for many years and have hung out in Vegas, New York, San Francisco and hopefully many more fun...

The Adani Group has been quite the wealth generator over time. But, in brief periods, they also tend to hit lower circuits. SO definitely a lively bunch, that's for sure!

It's been a while since we updated the trends in this space, so this is just that. An update in the levels that are to be followed.

So let's take a look, shall we?

First up, we like to see where the group as a whole is and what the trend is like there. Here's where the ASC custom Adani Group Index is as of today.

We saw the stocks making their highs in June this year, following which the group stocks went into a corrective mode (both time and price). What we can also see here is that the index hasn't crossed the high made in June and is still trading beneath it. We'd like to see this breakout here to be heavily bullish on this group again. Until then, it's a selective game.

Click on the image to zoom in.

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 November 12, 2021. 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.

Watch this video for a "...

From the desk of Willie Delwiche.

Key Takeaway: Inflation remains hot as narratives shift. Yields perk up as the bond market takes notice of price pressure. Gold catches a bid as real rates remain negative. Breadth trends point to US leadership.

• Recent leaders have become near-term laggards, with Energy and Financials dropping to the bottom of the shorter-term relative strength rankings. Energy remains strong overall across the rankings and our industry group heat map. The cooling in Financials could be more significant.
• Materials is gaining strength from a sector ranking perspective and is seeing improving trends in our industry group work. We are also seeing pockets of strength within Industrials (Capital Goods and Transportation) and Tech (Semiconductors).

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...

A stock recently got on our radar after share prices exploded higher following a recent earnings report.

Now that the market has given players in this stock some time to marinate in the new reality presented during this last quarterly report, options premiums are beginning to return to normal (ie "low") prices. And this is making it more compelling for us to position for what we feel is another leg higher.

Over the last few weeks, we've been making the case that Bitcoin is likely to resolve to the upside and head toward our first target of 85,000.

In a note we published last Monday, we outlined a variety of developments taking place that's been supporting our macro bullish thesis. Since then, Bitcoin has continued to consolidate following its run-up after achieving all-time highs, and we haven't seen any dramatic price action in either direction.

So, in today's post, we'll be revisiting some of the data points we're heavily weighing towards our approach in the coming weeks.

In recent weeks, we've been discussing the compression of volatility in a lot of crypto assets, primarily Bitcoin.

There are a number of ways we can go about quantifying volatility, but we opt for a simple 20-day width of the Bollinger bands. For those unfamiliar, these are calculated by taking two standard deviations from the 20-day moving average. As the width between the bands gets increasingly compressed, it points to tightening volatility, which tends to proceed...

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.

• This week, our macro universe was negative as 68% of our list closed lower with a median return of -0.38%.
• US 10-Year Yield $TNX was the big winner, closing out the week with more than an 8% gain.
• The biggest loser was Lumber $LB, with a weekly loss of -12.18%
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 70%.
• 15% made new 4-week lows.
• Meanwhile, 21%%...

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.

The Bond Market Has the Answers

Another potential bearish development that is on our radar right now is continued pressure on the long end of the yield curve. While the short end has held up much better, we’ve seen long-duration rates crumble back toward their summer lows over the last month or so. While treasury spreads have contracted and the curve has flattened a bit since the summer, we don’t find these developments too concerning considering where yields have come from since last summer. It’s only normal for the short-end to play catch up a bit in a rising rate environment. Although, what bulls definitely do not want to see, is yields break down to new lows on an absolute basis. Since the long end is moving the fastest, the weakness will show up there first. As such, we’re watching the 30-Year US Yield very closely as it retests its key summer lows. It appears to have found support there for now....

This week we’re looking at a long setup in the Infrastructure sector space. Industrials and Infrastructure are showing strength and we're taking a look at one such stock today.

We retired our "Five Bull Market Barometers" in mid-July last year to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

The worst investment on earth over the past 15 months could finally be starting to wake up.

Think about it, you could have literally bought anything last summer and made money. A lot of money, actually. Except precious metals.

It's been a sucker's trade for a long time.

That's one thing that's made this that much more attractive to me. The angry gold bugs have finally shut up and admitted defeat.

And historically that's precisely when things start to change:

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 Willie Delwiche.

I’m no crypto expert - I don’t even play one on TV. But every week seems to bring a new story about ways in which cryptocurrencies will not only stick around but see wider usage in the economy and as financial instruments. I have no idea if this will be the case, but new highs this week in Ethereum (and others) suggest the market is looking in that direction. Whether it is an investing fad, gold for a new generation of investors or an entirely new asset class remains to be seen. A survey published by Pew Research this week shows that while nearly half (43%) of males 18-29 have invested/traded/used cryptocurrencies, only about one-sixth of the overall US adult population has done so. So if it is sticking around, it could very well still be early days for this space. We’ve dipped our toes in this water, using ETHE to gain exposure in our Tactical Opportunity Portfolio. It’s been volatile this year, but the trend (which we are following) has been up and to the right. Regardless...

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. 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 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 Ian Culley @Ianculley

Commodities are streaking higher, providing plenty of alpha across the entire space to anyone who can pry their eyes away from their altcoin charts.

Cotton and coffee continue to rip. Crude oil and the energy space are grinding higher. Live cattle are breaking out. Even precious metals are starting to catch a bid.

But what about the grain market? Last week, we pointed out that our Minneapolis Wheat position had hit our target and that it was time to feed the ducks.

Today, we’re going to highlight a couple of grain contracts we want to keep on our radar for buying opportunities in the coming weeks and months.

Let’s dive in!

First up is the March 2022 corn contract:

Like many other cyclical assets, corn futures peaked in May and have since been chopping sideways in a broad range. As the consolidation continues to develop, price has repeatedly found...

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

Everything's falling into place for the bulls.

Mid-caps and small-caps finally joined their large-cap peers at new record highs earlier this month. A bullish expansion in breadth is confirming these breakouts at the index level.

We're also seeing strong confirmation in the form of other risk assets resolving above key levels of interest.

As suspected, our risk checklist has moved up to its highest level since we began tracking it this summer. This list does an excellent job summarizing the global landscape.

Here’s a look at where things stand presently:

What we’ve done here is pinpoint critical levels in some of the most risk-on markets and relative ratios in order to gauge the current level of risk appetite.

Whether these charts are above or below our levels is...