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:

Last August, we covered live cattle, anticipating a breakout from a multi-year consolidation. Price chopped around the upper bounds of its range for a few months but ultimately resolved higher, completing a large basing pattern.

From the desk of Willie Delwiche.

The March 2021 CPI data (released in April of last year) showed the largest monthly increase in the prices in over a decade. The 2.7% yearly change in the CPI at that point was dismissed as being due to base effects written off as transitory. Some were even talking about how an uptick in inflation would be welcome. It has proven to be neither unduly influenced by base effects nor transitory. As inflation has continued to move higher and the Fed has belatedly attempted to bring it under control, neither stocks or bonds have responded favorably. The S&P 500 is down 3% since April 2021 and the aggregate bond index is down 8.5%. Commodities, however, have flourished, rising more than 77% in that time period. 

The details of today’s inflation report suggest price pressures remain prevalent. The Fed will likely have to intensify its inflation-fighting efforts. Whether from the Fed, the current Administration or the private sector, folks who were dismissive of inflation in Spring 2021 should have their current perspectives taken with a grain of salt. 

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Well helloooo again volatility! It's been an interesting week.

There are not a whole lot of charts out there that have me too excited to put any aggressive risk on here. But thanks to the jump in volatility, we do have an opportunity to sell some premium in a staple with a nearby risk management level that should help keep losses minimal if we're wrong.

So let's get right to it!

This is the video recording of our June 10, 2022, All Star Charts Crypto Weekly Strategy Session.

Bonds form the largest money market in the world. The world of fundamental analysis has a lot of data, but when it comes to technical analysis, we narrow down the factors that matter. Basically, Interest rates are to the bond market what the price is to the stock market. This post will look into this topic and examine the present opportunities.

We've adjusted a position in the Paid-to-Play portfolio today:

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.

Whenever in doubt, zoom out!

That's how I learned it. Mostly the hard way.

And that's something we like to do once a month, is really zoom out.

Monthly Candlesticks are great for that!

During this month's review I really noticed how much stronger some of the European Indexes were. Especially this one here:

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:

These two charts have followed similar...

This is the video recording of the June 9th Weekly Town Hall w/ Willie Delwiche.

06/09/22 2:00 PM ET

From the desk of Willie Delwiche.

In Milwaukee, early June days when the temperature struggles to even get into the 60's happen almost every year. 

I've lived here long enough at this point (more than half my life) that it's not really a surprise anymore. For the first few years I lived here, I believed friends and family when they reassured me that it was "unseasonably cold." But I caught on soon enough.

In fact, it was 55 degrees and overcast here just yesterday. It had been raining off and on all day.  

I have no problem with any of those conditions – I’m not writing this note to complain about the weather. While I don’t think of it as Summer and it’s not what I was looking forward to, I can adjust. 

When the worst stocks in the world can't go down, what does that say about current market conditions?

Granted, I'm more into breakouts above horizontal trendlines than diagonal ones, but as Steve Strazza told me yesterday, "of course, but one comes before the other".

When you're right you're right Mr. Strazza.

Here's that breakout we were discussing:

The next new trade in our Paid-to-Play portfolio is:

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.

We debuted a new scan recently which goes by the name- All Star Momentum.

All Star Momentum is a brand new scan that guides us towards the very best stocks in the market. We have incorporated our stock universe of Nifty 500 as the base this time around. Among the 500 stocks that we follow, this scan will pump out names that are most likely to outperform the market.

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing 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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey...

This is the video recording of our June 8, 2022, Inside Scoop Weekly Strategy Session.

From the desk of Willie Delwiche.

Key Takeaway: There is plenty of talk about investors turning fearful. This is reflected in more bears than bulls on the various sentiment surveys and high demand for puts relative to calls (though this is being distorted by the collapse in call option activity). But from a longer-term perspective, risks to the equity market remain elevated. Stocks are still historically expensive and overowned. Updated data from the Fed this week will clarify how (if at all) the household asset allocation mix shifted in Q1 after finishing 2021 with the highest exposure to stocks versus bonds in history. While the cyclical rise in pessimism may provide enough fuel for bounce attempts and counter-trend rallies, it will be  difficult to suggest that a major reset has occurred until stocks are inexpensive and underowned in addition to being unloved. 

Sentiment Report Chart of the Week: Equity Exposure Charts A Challenging Path

The Federal Reserve report from which we get the data behind US household asset allocation comes out quarterly, and with a lag. We will finally get Q1 2022 data this week. While...

It's no secret that long-duration assets have been hit the hardest in this bear market, with interest rates on the rise.

Think about growth stocks and the tech junk that peaked in February 2021 -- it's been a painful bleed lower ever since.

But, in recent weeks, even the worst stocks have stopped going down.

And, what's more, they're finding footing at notable levels of interest, whether it's their pre-pandemic highs, their pandemic lows, or their 2018 lows.