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

The US Dollar Index $DXY resumes its relentless march higher.

But the full story surrounding the dollar’s dominance is a bit more complicated.

Lately, we’ve been pounding the table about the narrow scope of the DXY, as 83% of its weightings come from just three currencies – the yen, the pound, and the euro.

All three continue to lose ground versus the dollar, and this is exactly what's driving the rally at the index level.

On the other hand, the USD has not performed as well against other currencies – especially emerging markets and commodity-centric ones. 

While this remains the case, we’re starting to see USD strength expand beyond the major components of the DXY. We're also seeing some nice long-term patterns materialize that favor the US dollar.

A great example is the rounding bottom in the US dollar-Korean won cross – USD/KRW.

Today’s Hot List is a short one.

Durable Capital Partners continues to build its position in the language-learning website and mobile app Duolingo Inc $DUOL.

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 April 15, 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

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

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Tech Weighs Heavy on US Stocks

US equities have outperformed their global counterparts for the better part of the last decade. This is largely attributed to the vast differences between the weighting and composition of US and international markets – mainly, the heavy weighting toward technology in the US and the relative absence of tech outside the US.

The overlay chart of Tech vs. the S&P 500 and the S&P 500 vs. the ACWI All World Index ratios tell the story. Tech dominance in the US strongly correlates with US dominance over global markets. With tech taking the brunt of the recent selling pressure, it calls into question the continued outperformance of US equities. This reiterates the possibility that what has worked for the past decade may not work in the years that lie ahead. Position accordingly…

We’ll lead off today with an update on the big activist story we’re all paying attention to.

After meeting last week to discuss Elon Musk’s takeover offer, Twitter’s $TWTR board announced the adoption of a “poison pill” that makes it economically untenable for Musk to acquire more than 15% of outstanding shares.

It’s also being rumored that Musk is considering taking on partners for his bid for the company.

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

Commodities are off to another record year -- and it’s only April!

Crude oil and friends are leading the charge as the energy-heavy CRB Index is up 34% year to date. 

Oil ripped above 100 in February and has been in a corrective phase since. The energy complex remains red-hot though, with natural gas futures breaking to fresh 13-year highs this week.

While crude oil finds its footing, its derivatives -- heating oil and gasoline, are coiling just beneath all-time highs and gearing up for some massive base breakouts.

We’re also seeing some bullish data points for the broader oil and gas industry as crack spreads are expanding and signaling a healthy demand for black gold. This bodes particularly well for oil refiners.

All of this price behavior is what we like to call rotation.

It's an essential characteristic of any real bull market, and it’s exactly what we’re seeing from commodities these days.

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 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 Steve Strazza @Sstrazza

We've discussed a number of new setups during our live strategy sessions the past two weeks. 

Today, we’re going to reiterate some of our favorites that are still actionable.

Click here to watch the replay of Wednesday’s call if you missed it.

We also have a new name from the oil and gas space that just broke out to fresh highs following some insider buying earlier in the year. 

Commodity stocks keep working and insiders keep buying them. As long as this is true, we’re going to keep buying them too.

Before we get to our new setup, let’s recap some existing trade ideas.

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

Treasury Bonds have collapsed in recent months as interest rates have rallied to their highest levels in years.

And it’s not just treasuries, the trend is lower for corporate bonds as well.

While fixed income markets have experienced steady selling pressure since 2021, downside volatility has accelerated in recent months. Following the worst Q1 returns in decades, bonds have continued to plunge to kick off the 2nd quarter.

The best way for us to take advantage of this is to keep finding clean setups to short.

Today, we will outline a couple of shorts in high-yield debt and discuss what a sustained downtrend for these bonds could mean for the broader market.

First up is the High-Yield Corporate Bond ETF $HYG: