JC has been giving a special mastermind class on Technical Analysis, and last week he invited me on to discuss momentum thrusts and crossovers. You can watch it here.

We dove into a variety of topics, covering initiation vs exhaustion, thrust clusters, and even a conversation on the difference between MACD and PPO.

One of the points I hoped to drive home in this presentation was around how to know when a momentum thrust is significant. 

For me, momentum thrusts and breadth thrusts are exactly the same in this way. When they are notable, they are hard to miss. They come in spurts and clusters.

What do I mean by this?

Let’s use China as an example because I think we are witnessing a historic initiation phase right now.

A few weeks ago, Chinese stocks had their second-best day in history. 

People tell me crazy shit on a regular basis.

As a market participant, I had to get used to this. 

My golf buddies have been promising me the end of the world for years now. Some of them even have special food for it.

My Florida man neighbor is absolutely convinced that Jerome Powell heads a top-secret underground society of the world’s wealthiest individuals.

This is the kind of crazy that pollutes my eardrums almost every day. I’m numb to it. I’m barely listening at this point.

But there is one word that really moves me. It always catches my attention. 

Uninvestable.

When they tell me something is uninvestable, I really perk up. It’s music to my ears.

I remember when crypto was uninvestable in the winter of 2022. Solana was in the single digits. It’s up like 1,300% since.

Who remembers the uninvestable stocks from last year?

2023 was a bad one for the banks. Bank runs. Contagion. Balance sheet problems. Government bailouts… 

“You can’t own these stocks!”

With stock market investors looking every which way at different market-moving headlines today, let's take a step back and talk about what's really important.

We just got monthly candles. It's time to zoom out. 

And when we do, is there a chart more important than the US Dollar Index $DXY right now?

The dollar has had a very strong inverse correlation with stocks and other risk assets for several years now.

Equities have done well for the past two years while the dollar has been rangebound. 

Just imagine how they'll do if DXY breaks down from its current range:

I'm headed to the beach today.

It's been a rainy and windy week in the Florida Keys so we've been all couped up inside.

Now that the Hurricane Helene storm system has played its course, we're due for some beautiful weather.

I woke up this morning and I checked the forecast.

It said the sun will be shining.

Another thing I typically do from bed each morning is check my crypto accounts and watchlists. 

When I did, I noticed the SOL is shining too.

Solana has rallied about 20% since the middle of last week.

When it comes to the overall crypto market, Solana is as important as anything.

It is the 4th largest token with a market cap of about $74B. For context, if Solana was in the S&P 500, it would carry a larger weight than large cap stocks like Target, Crowdstrike, and FedEx. It's a big deal.

But more importantly, Solana is the secular leader when it comes to crypto. 

It tends to move first, and tip off the rest of the asset class, and it tends to outperform during bull cycles.

Last summer, Sean and I toured Southeast Asia and gave presentations at CMT events in seven different countries.

I was lucky enough to learn firsthand about the local companies, the nuances of their financial markets, and the compelling growth stories that are playing out in this exciting region of the world.

I fell in love with some of the places I visited.

In countries like Vietnam, Malaysia, and the Philippines… you could literally see it. You could feel it in the air. You could hear it in the voices of the people we met and had conversations with. It was an exhilarating experience.

The runways for these countries to keep growing and eventually play a larger role in the world economy was obvious. The investment opportunity seemed massive.

I was all in on emerging Asia. It was a no-brainer.

But, there was one big problem…

The charts were not telling this story of growth and prosperity. These countries were all trading around new lows.

I was telling the same joke at every new CMT meeting when I got to the segment about local markets. I only had good news for our friends in Japan.

The precious metals market is heating up.

Gold has been making new all-time highs consistently since March and now Silver looks like it wants to join in on the fun. 

I think there is a major catchup trade brewing as silver threatens to resolve this multi-year basing pattern. In fact, it looks like it may already be underway.

Today it rallied nearly 5%, marking its best day since May, and closed at its highest level in over 10 years.

I love to see this kind of momentum on breakouts.

I also think gold has given us a beautiful roadmap for where silver is headed next.

The chart below shows the historical correlation between gold and silver.

Uncorrelated trades continue to pay off as an effective way to diminish portfolio risk in this messy market environment.

A few days ago, a trade was put on United States Natural Gas Fund ETF $UNG for Breakout Multiplier members. You can see the details here.

Fast forward to today, and the value of those options have doubled. This gives us and our members the opportunity to take half off the table and enjoy a free ride.

While we are able to reduce our risk in the trade, and always want to in these cases, we still like Natural Gas a lot… maybe even more than we did when we put the trade on initially.

Here’s a look at natty gas putting the finishing touches on a short-term bearish-to-bullish reversal within the context of a longer-term rounding bottom formation.

When it comes to pot stocks, there is Innovative Industrial Properties, and there is everything else.

These guys are just built different than the others.

They don’t own the cannabis. They don’t even touch it. They own the properties that are used to grow, distribute, and sell it.

For this reason, they are not susceptible to all the well-known risks that the growers and dispensaries have to deal with.

So it is no surprise that the chart looks so different from its peer group.

We had just stepped onto the tee box at the 18th hole a couple of days ago when it started to sprinkle.

Were it January we might have said, “Hey, let’s just finish the round, maybe we get a little wet…”

Not this time of year. The sky was turning. We felt the water. The only responsible thing to do was head for the clubhouse.

Clouds burst open right as we got there. Had we tried to finish the round we would’ve been soaked.

It’s hurricane season in Florida. This time of year, when it rains, it pours.

And it’s volatile. Often you don’t know when the rain is coming. Meteorologists do the best they can. But these storm systems move fast and defy forecasting.

All we can do is seek shelter when we see it coming.

It reminds me a lot of the current market environment. Selling pressure and volatility have really picked up since July.

They tell me “volatility got crushed.” 

If not for all the commentary surrounding the historic rise and fall in the VIX, I wouldn’t have known about it.

The volatility index is simply not a part of my daily chart review. It’s not that important to me.

With the launch of our new breakout multiplier service, I’m finding this comes as a surprise to people.

The strategy is basically to get long calls or puts and bet on big directional moves.

What this means is that we will ALWAYS BE LONG VOLATILITY. 

Even when the VIX spikes to its highest level in years. We are buyers of volatility and the way I see it, we are simply price-takers.

If vol is high, well maybe there is a good reason for it.

As market technicians, we know the market is not efficient, but we also don’t second guess the way it prices things.

My mentor Brian Shannon taught me that “only price pays.” There is nothing more true in the market.