Expert technical analysis of financial markets by JC Parets
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 Ian Culley @IanCulley
The big news in commodities this week is gold breaking down to its lowest level since early 2020.
I recently outlined what a downside resolution for the shiny yellow rock could mean for inflation and the entire commodity space.
Spoiler alert: a fresh leg lower from gold doesn’t bode well for raw materials or the prospects of sustained inflation.
Nevertheless, inflation hasn’t gone anywhere, at least not yet.
As long as that’s the case, we expect commodities to see further upside, albeit not in unison. The broad rally witnessed at the end of 2020 into 2021 is unlikely to be repeated in the near future.
Regardless, stellar buying opportunities will present themselves.
We aren’t going to let the bifurcated nature of commodity markets stop us from catching the next explosive rally.
In other words, the supply and demand dynamics for copper don’t affect our decision to trade soybeans or wheat.
Instead, let’s trade what is in front of us – even as concerns of a global economic slowdown accentuate differences among the various contracts.
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.
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 Tuesday September 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 Tuesday night: [Read more…]
From the Desk of Ian Culley @Ianculley
Interest rates have resumed their ascent following a brief summer pause. And, in recent weeks, their climb has accelerated.
Aside from lower bond prices, what do higher rates mean for other assets, such as stocks and commodities?
It might seem like a simple question. But its relevance is undeniable given the current market conditions.
We’ve been vocal about the cyclical areas of the market that benefit most from a rising rate environment – think commodities, energy, materials, and banks. We’ve put out plenty of trade ideas in those areas.
But not all risk assets enjoy a tailwind when yields rise.
Higher rates mean downside pressure for long-duration assets in general, not just bonds. This also includes growth stocks!
From the Desk of Steve Strazza @Sstrazza
Welcome to the 2 to 100 Club.
As many of you know, something we’ve been working on internally is using various bottom-up tools and scans to complement our top-down approach. It’s really been working for us!
One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.
When you look at the stocks in our table, you’ll notice we’re only focused on Technology and Growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.
Then, like any good technician, we filter the list down to those closest to new highs.
This allows the cream of these strong groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
From the Desk of Ian Culley @IanCulley
Sometimes you have to go back to the basics.
One simple concept has served me well over the years: Don’t fight the primary trend.
There are many other best practices I use to maintain my sanity regardless of underlying market conditions. But sticking with the underlying trend is fundamental to any trader’s success.
As Charles Dow established more than a hundred years ago, trends persist! This concept is one of the key Dow Theory tenets and forms the foundation of any trend-following strategy.
It’s our job as technicians, traders, and investors to identify the primary trend and ride it as long as possible.
And it’s difficult to imagine a stronger trend in 2022 than the rising dollar.
