In today's Flow Show, me and Steve Strazza came out swinging with an opportunity to add to an already winning options trade.
Back in late January, we entered into a bullish longer-term bet in Wells Fargo $WFC. You can read about it here. That original position still has until January 2025 to play out (another nine months).
But take a look at this high & tight flag forming on the eve on their next earning release scheduled for this Friday morning:
The NYSE Oil Index includes the leading companies involved in the exploration, production, and development of petroleum.
This index dates back to 1984 so it's got some history to it.
It also includes a lot of Energy stocks headquartered outside the United States, giving investors a much more global perspective, as the NYSE tends to do.
On Friday, this index closed at the highest price ever.
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 Airbnb and Uber.
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.
We held our April Monthly Strategy Session earlier this week. Premium Members can access and rewatch it here.
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.
How I learned it more than a couple of decades ago was that there were 3 asset classes: Stocks, Bonds AND Commodities.
But a funny thing happened throughout the 2010s. Commodities did so poorly, particularly when you compare their performance to Stocks and Bonds, that investors completely forgot that Commodities were an asset class.
Many newer investors never even knew in the first place.
But yes folks, there are 3 asset classes. And that 3rd one that everyone conveniently forgot about is the one that is dominating returns this cycle.
Here is a ratio of Commodities to Bonds in a strong uptrend as everyone keeps telling me that interest rates are falling.
It's actually the exact opposite. Interest rates keep going up, as Commodities rip higher and bonds keep falling apart.
Everyone is obsessing over the Fed’s rate cut plans. Meanwhile, interest rates are climbing to their highest level since early December.
Instead of following Fed gossip and what-ifs, focus on what is: Yields continue to creep higher as inflationary assets rip.
Check out our Global Benchmark Rate Composite, an equal-weight basket of Developed Market 10-year yields (Germany, UK, Canada, France, Italy, Spain, Switzerland, Japan, Australia, and the US):
Our global composite is holding well above the lower bounds of a yearlong range, catching toward the underside of a flat 200-day moving average.
Yields on sovereign debt show no signs of an imminent collapse.