As investors, the first step in deciding whether to buy something or not is to identify the direction in which price is heading.

So many investors out there choose to skip this step.

I never understood that.

We know for a fact that asset prices trend. We know. We all have the data. It's just a fact.

So if we know that, then why wouldn't we begin our process by identifying which direction price is heading?

"Should we buy this stock?"

Well, is it going up in price? Down? Or sideways?

Trend recognition is also really helpful in identifying the type of market environment we're in.

"Are the majority of stocks going up? Down? Or sideways?"

At the end of every month we get a fresh batch of monthly data that goes a long way in helping us identify these trends.

On Friday we just got the highest monthly close for both the Nasdaq100 and S&P500 in over a year.

This is now the 3rd consecutive month that they do that:

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 Wednesday 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 Wednesday evening:

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.

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

From the Desk of Ian Culley @IanCulley

The most important crop report of the year has hit.

Yes, it’s generated quite the buzz over the past few weeks, as grain markets ripped higher in anticipation.

Some observers even speculated that Friday’s report was the most important in the history of the agrarian economy.

So let’s round down, be conservative, and call it the most important crop report in 5,000 years.

Seriously, though, it was a big deal, as acreage estimates for soybeans represent the largest miss since the report's inception – or, like, ever, in history. 

More importantly for traders and investors, the report brought increased volatility.

If you’re like me and prefer to sit out these kinds of days, you’re patiently waiting for the dust to settle. 

Meanwhile, if you’re at all put off by the volatility of these futures contracts, I have a vehicle that promises a much smoother ride…

Let’s talk about Archer Daniels Midland $ADM, “supermarket to the world.”

The $41B commodity behemoth has more than 100 years of experience in the grain markets.

From the Desk of Ian Culley @IanCulley

Messy, messy, messy.

If there’s one market description I’ve grown tired of more than others – it’s "messy." It’s my pain trade. 

Interest rates, the US dollar, crude oil, gold – you name it! – all are trendless and range-bound.

One of our viewers during yesterday’s live What the FICC? episode offered up an alternative description: ambiguous. I like it!

But there’s one area of the fixed-income, commodity, and currency landscape poised to break free from this ambiguity…

US real yields!

Check out the US five-year real yield challenging a shelf of former highs:

Sector rotation is the lifeblood of a bull market.

We saw it at the beginning of the year as the laggards caught up to the leaders.

Remember, in the back half of last year, almost everything was working, EXCEPT large-cap growth stocks.

What are the best performers this year? Large-cap growth stocks.

More recently, we've seen rotation into Small-caps and Industrial stocks that were the underperformers in the early part of 2023.

This is perfectly normal behavior for bull markets.

In bear markets you see the opposite. In bear markets, the leaders tend to catch down to the laggards.

This is definitely not that.

So what's the bet?

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.

[11/16: stop updated to 32]

If it ain't broke, don't fix it.

We've been witness to many charts, that look like today's setup, breaking out and turning into big winners in recent months. And with very few signs of this current bull market running out of steam, we think there will be many more repeats of these profitable patterns in the weeks and months ahead.

And cheap options premiums continue to make it advantageous to play these moves simply with long calls.

Strazza has been pounding the table on DraftKings for a couple weeks now and today's trading action has me convinced that the time is right to get involved.

First, the chart:

Is it time to just hold your nose and buy Disney down here?

Sector rotation has been working.

The laggards are catching a bid.

Is Disney the next stock that money is going to rotate into?

From the Desk of Ian Culley @IanCulley

Most emerging market currencies have been in beast mode.

The Chinese yuan is a notable exception.

In fact, most Asian currencies haven’t fared well against the dollar over the trailing three months.

Latin American and Eastern European currencies – mainly the Brazilian real and the Mexican peso – are driving these markets.  

Analyzing these currencies through the Emerging Currency Fund $CEW as it makes new 52-week highs is useful.

But I’m more interested in the Chinese yuan as it slips and slides against the dollar.

Why? 

China represents the world’s second-largest economy.

And, based on the charts, the yuan could provide valuable insight into the direction of US stocks…

Check out the relationship of the US dollar to the offshore yuan, or the renminbi (USD/CNH):

“What are you afraid of?”

JC posed this question to me yesterday on the Morning Show.

For context, he was asking me about our upcoming 21-day trip to 8 cities in Southeast Asia.

I might have surprised myself when I quickly and confidently answered: “Nothing.”

And I meant it.

I’ve actually been thinking a lot about this topic lately.

“Fear” is such a powerful and loaded word. It toys with our emotions. While often protecting and keeping us safe, our fear-stoked emotions also can trigger us into making poor – and sometimes awful – decisions.

All our best-laid plans go out the window when fear takes over.

Franklin D. Roosevelt, the 32nd President of the United States said it best: “The only thing we have to fear is fear itself.”

This is doubly true for traders. We need to do everything in our power to keep our positions or portfolios structured so that nothing can scare us. Because when we’re scared we lose all sense of control. We lose rationality. We lose perspective. And then we either rush prematurely for the exits or worse, double down on our mistakes.

We need to fear “Fear.”