From the desk of Steve Strazza @Sstrazza

Last week's mystery chart was a popular one, so we inverted it to make things a bit more challenging. Someone still guessed it... Nice work.

It was the iShares 7-10 Year Treasury Bond ETF $IEF. The issue with inverting Bond charts is that when you do they look identical to yields. In the case of IEF, we're basically dealing with the US 10-Year Yield $TNX.

Rising rates has been one of the main themes early this year as developed market yields have accelerated higher and hit the pockets of bond investors all over the world.

In this post, we'll check in on some of the most important and most telling credit instruments on both absolute and relative terms in order to piece together the message the bond market is sending investors.

From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

Rotation into value is dominating the narrative right now as money continues to pour out of the former leaders and into long-term secular laggards like Financials and Energy.

In line with this trend, we continue to focus less on US Large-Caps and Growth, and instead look for opportunities in SMIDs, Cyclicals, and International stocks.

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 longer-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 5-9 years.

Introducing the Young Aristocrats. We like to say these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & 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.

Welcome back to our “latest Under The Hood” column for the week ending March 5, 2021. As a reminder, this column will be published bi-weekly moving forward, and rotated on-and-off with our new Minor Leaguers column.

In this column, we 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.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.

The Canadian economy is dominated by Financials and has a diverse and abundant exposure to natural resources. Despite the close proximity, the composition of the country's stock market couldn't be more different from that of the US.

They have a much higher relative exposure to areas like Financials, Energy, and Materials... Basically, all the things that are working.

On the other hand, they have significantly lower exposure to areas like Technology, Health Care, and Discretionary... Basically, all the areas that are NOT currently working.

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

When reviewing our chartbook this week, one major theme that stood out is the relentless bid we continue to see in Crude Oil.

Most risk-on commodities have consolidated or pulled back recently as the dollar has rebounded back to its highest level in over three months.

But, not oil...

Crude has completely ignored this action from the US Dollar and tacked on an additional 12% gain since DXY bottomed about two weeks ago.

Ever since trading at negative prices last spring, Crude has been on an absolute tear.

Price just broke above its key prior highs and closed the week at its highest level since 2018. As long as Crude is above this key former resistance around 65 the bias is higher and we're targeting the 2018 highs just above 75 over the near-term.

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley.

The US Dollar is one of the most important pieces of the intermarket puzzle.

It affects all the major asset classes, and a rising dollar could impact the current market environment by creating a headwind for stocks and suppressing commodity-centric and cyclical areas of the market.

This could put pressure on our current market thesis as US Dollar strength has the potential to put a damper on the recent rally in risk assets.

In this post, we'll take a look at what's going on underneath the surface in the US Dollar Index by running through some of it's largest components.

We'll then weigh the evidence in front of us in an effort to determine a directional bias for King Dollar.

From the desk of Steve Strazza @Sstrazza

I want to elaborate on a big theme of late that's been on my mind. We've written about it, discussed it internally - as well as on Clubhouse, and just this morning JC and Willie were both tweeting about it.

One major implication of the impending trend reversal in growth vs value is its potential effect on passive investment vehicles.

Considering what a mega-trend passive investing has become with the ETF boom over the past decade-plus, this is likely to impact investors far and wide... If they don't reposition themselves appropriately.

The reason for this is nuanced but in my opinion, it boils down to the argument that passive is really just active and there have been significant changes in market structure since the financial crisis that have resulted in the major averages being dominated by just a small handful of stocks.

From the desk of Steve Strazza @sstrazza

Check out our latest Mystery Chart!

What we do here is take a chart that's captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it's an absolute price chart, other times it's on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren't able to recognize what's in front of us, we put aside any biases we may have and scrutinize it objectively.

While you can try to guess the chart, the point is to make a decision...

So let us know what it is… Buy, Sell, or Do Nothing?

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley.

We held our March Monthly Strategy Session last night which Premium Members can access and rewatch here.

In this post, we’ll provide a summary of the call by highlighting three of the most important charts and topics we covered along with commentary on each.

Let’s dive into it.

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

We think it's time to buy Gold Miners again, specifically the VanEck Vectors Gold Miners ETF $GDX.

The yellow metal has not been a great place to deploy capital over the last 6 months as the environment has significantly favored stocks over rocks... and risk-assets over defensive ones in general.

Owning Gold or Gold Miners has been nothing more but opportunity cost. However, there is mounting evidence that suggests now might be the time to jump back into this trade.

First, Commodities have really been working as an asset class. We've been pointing this out for months now, from Industrial Metals and Ags to even petroleum-based commodities.

Although through the early innings of this Commodities resurgence, Gold and Gold Miners have taken a back seat as prices peaked all the way back in the summer of last year and have been trending lower since.

From the desk of Steve Strazza @sstrazza

We've enjoyed a ton of success with our bottoms-up scans and the columns they've inspired over the past year.

We've already launched four columns around them since last summer, and we have more coming soon.

When we combine these scans with our traditional top-down approach, they make it almost impossible to miss profitable opportunities and key market themes.

Today, we're sharing one of our internal favorites with you. It's called "Fade The Street,"  and we introduced it in a report last month which you can read here.

It was a big hit and there's been a lot of change since then, so we thought a follow-up was appropriate.

Our Fade The Street scan leverages buy/sell ratings and price target data from sell-side analysts to identify strong stocks with significant potential tailwinds that can propel prices higher in the future.