From the desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as a market of stocks.

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions… but there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as the Hall of Famers, the Minor Leaguers, and the 2 to 100 Club. We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports. Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

You can pretend the bond market doesn't matter all you want.

But I'm here to tell you that this $115 Trillion + market that we call "bonds" is what's moving things around here.

It starts with credit.

If there is stress in credit, then you're going to see the implications across markets.

Internally, we were talking yesterday about the energy space and the recent pullback in prices. While still the strongest sector in the market in 2022, this move off the highs has been notable.

Is the trend over? Or was that just the "hot money" taking profits?

I'm not sure we have a definitive answer to that question yet. It looks to me that the market is still sorting that out. And this condition of indecision, coupled with high implied volatility priced into options is combining into a nice opportunity to collect some options premium while energy figures itself out.

So we're going to wade into the energy pool with a delta-neutral short-premium options trade.

From the desk of Ian Culley @IanCulley

In almost every market environment, there are assets we want to buy and assets we want to sell. That holds even when we think the only option is to sell.

Recently, the strong buys have been in commodities and cyclical areas of the market, while bonds and the major stock indexes have sold off. That's dramatically changed in recent weeks, though.

Now, all the major asset classes –  bonds, stocks, and commodities – are under pressure, as bears come for the leadership groups. It seems nothing is immune to bearish price action these days. 

Despite the broad selling pressure, there's still an asset we want to buy: the US dollar. That’s right, the good old greenback! It’s one thing the bears can’t seem to crack.

If we think about it from an intermarket perspective, a defensive bid for dollars makes sense given the downside pressure on risk assets across the board. We don’t think it’s a coincidence.

Regardless, the USD is strong and shows no signs of changing anytime soon. 

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Tuesday July 5th @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Tuesday evening:

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.

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 June 24, 2022. 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.

Last week the US Healthcare Sector hit new multi-year highs relative to the S&P500.

The Relative Strength has already been there under the surface.

And when you look at Healthcare on an absolute basis you can see the sideways digestion of prior gains during a period where most stocks and indexes were falling:

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.

Dr. Copper is in the hot seat again this week!

I know we just covered copper and the copper/gold ratio. But this is a major development, so let’s dive in a little deeper.

When one of the most important procyclical assets breaks to fresh 52-week lows, it takes center stage. It also has major implications across a variety of markets.

But what about energy? What about grains and softs and the rest of the commodity space?

Well, most of those contracts have already been in correction mode.

And, based on the recent selloff in energy and other commodity-related stocks, a much deeper correction could be in store for these raw materials.

It’s definitely something we’re monitoring. And that’s where copper and today’s chart in focus come into play.  

Let’s take a look.

Here’s an overlay chart of copper futures and the five-year breakeven inflation rate:

From the desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 100 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 largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness.

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  

Bonds are off to their worst start in the past 40 years, possibly ever! 

It’s not even close. 

As we near the end of Q2, the US Treasury Bond ETF $TLT is down almost 22% year to date. And that’s after its recent bounce higher.

There's been nowhere to hide, as these traditional safe-haven assets have been an absolute dumpster fire along with stocks.

But we’re starting to see some of those flames extinguished.

Some of the worst-performing stocks tipped the bond market’s hand ahead of the recent lows. That’s right: Those Big Tech names and Chinese internet stocks stopped going down months ago and now bonds are following higher.

Believe it or not, bonds and high-duration equities have a lot in common. The Growth $IWF versus Value $IWD ratio really tells the story.

Let’s take a look.

Here’s an overlay chart of the TLT and the IWF/IWD ratio: