From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley  

Now that inflation is no longer transitory and we’ve officially entered bear market territory, "recession" is the next buzzword on deck.

And don’t worry: Plenty of banter surrounding the yield curve will take center stage during all this recession talk. 

Somehow, an inverted yield curve has become synonymous with recession even though the historical record supporting this narrative leaves room for plenty of interpretation. 

The purpose of this post is not to present an argument on whether we’re already in a recession or if one is imminent. We’ll leave that up to the talking heads and economists.

Instead, we'll simply share where the yield curve is today and assess the likelihood of potential inversion.

Let’s take a look…

Here’s a triple-pane chart of the US 30-year, 10-year, and 5-year yields:

We give them fancy names like Bear Markets or Downtrends.

But all it really means is that the price of an asset is below overhead supply.

As investors, it's important to know that there are sellers at higher prices waiting to sell to you if/when given the opportunity.

While there are an infinite number of examples in the current market environment, the S&P500 offers a clean look at exactly this:

These are the registration details for our live mid-month conference call for Premium Members of All Star Charts.

Our next Live Call will be held on Monday June 20th at 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 Monday night:

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 Hall of Famers, 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.

From the Desk of Louis Sykes @haumicharts

I'm not sure about you, but these last few weeks have further reinforced my love and passion for crypto.

You know this crypto selloff has been severe when even the media outlets and evening news programs in tiny, old New Zealand are covering it.

Even after years of being with the All Star Charts crew, my family still has no idea what I do every day. Charts? Technical analysis? Cryptocurrencies? You write research? For who?

These are the questions I'm constantly asked. It's pretty hilarious.

So when I try and explain the headlines they're reading behind Luna, Ethereum crashing, or who this Do Kwon dude is, I'm often met with blank stares.

Spending my days obsessive and immersed in crypto feels like a video game. This whole industry and community are on an entire other planet.

To quote our Head Technical Analyst at All Star Charts, Steve Strazza: "Bullish setups are hard to come by these days."

Yeah.

But, for those willing to venture into the choppy waters, recent market action has provided us with some nearby risk management levels that give us the opportunity to act quickly if we're wrong, limiting our losses while giving us multiples of potential profit (as measured against the risk).

And today's idea comes from the only sector to show YTD gains this year.

What's not to like about that?

From the desk of Steve Strazza @Sstrazza

Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That's why we're turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we're curating a list of stocks that have raised their payouts every year for five to nine years.

We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money." Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

King Dollar is reasserting its reign at the expense of major global currencies and risk assets.

What started as a potential failed breakout last month is proving no more than a hard retest, as the US Dollar Index $DXY broke to fresh 20-year highs yesterday.

Even the most resilient currencies, such as the Canadian and Australian dollars and the Mexican peso, are losing ground against a surging USD.

As we’ve pointed out, this is not an ideal scenario for risk assets – particularly stocks.

Yesterday’s price action was a great example – dollar up, stocks down. 

This is not a coincidence.

Let's zoom out and analyze the dollar’s recent strength and then discuss what it means for these other asset classes.

Here’s a daily chart of the US Dollar Index:

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 10, 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.

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

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: