Expert technical analysis of financial markets by JC Parets
by JC
This week we got a terrific reminder about weighing all the evidence properly from new Miami Dolphins head coach Mike McDaniel.
In a recent podcast, the new Dolphins coach was asked about the role of analytics in today’s game and how it impacts his decision making.
I thought McDaniel’s answer was a great one and really resonates with how we approach markets here at All Star Charts, [Read more…]
by Ian Culley
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
The middle of the curve is catching higher as the US 10-year Treasury yield pushes toward its next milestone at 2.00%.
Now that we’re starting to see some follow-through to the upside, it raises the question…
Are these new highs in the 10-year sustainable?
With inflation expectations just off their highs, short-term rates surging in the US, and yields ripping higher across the globe, we think the answer is a resounding yes!
A few weeks ago, we discussed how global yields — particularly those in developed Europe — were confirming the new highs for US yields.
Since then, we’ve only seen this trend accelerate. With central banks turning increasingly hawkish, rates continue to break out to new highs around the world.
Today, we’re going to dive further into this theme by taking a look at a handful of benchmark rates outside the US.
Let’s dive in! [Read more…]
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.
But, now, we’re also highlighting lagging stocks on a recurring basis.
To quote Steve Strazza: “When commodity stocks go, they go!”
This pretty much sums up the talk we had this morning when coming up with today’s trade idea.
We were looking across the strongest sectors and hunting for opportunities to get involved. One challenge we were having is many of the stocks we liked had either already had a big move and we’d be chasing, earnings were on deck in less than a week, or the options chains were too thin for us to get good fills.
Finally, after some searching, we found a name that made sense. And it was one I wasn’t familiar with.
From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
In April 2020, crude oil traded below zero and marked the perfect capitulation event for a number of trends.
Around the very same time, both commodities and stocks bottomed and kicked off major rallies.
Until recently, commodities had underperformed stocks for about a decade. To make matters worse, they were moving lower on an absolute basis for most of that time as well.
Not only have commodities started to trend higher on an absolute basis again. They’re also undergoing a reversal in their relative trend with stocks and other alternatives.
We’ve been clear about our bullish position as we’ve discussed the potential for a new commodity supercycle for over a year.
Now, we want to take that thesis one step further as the evidence is building in favor of commodities experiencing a sustained period of outperformance relative to stocks.
To best take advantage of this trend, we want to be overweight commodities and commodity-related stocks.
Let’s dive in and take a look at some asset allocation ratios in order to illustrate what is taking place among the various asset classes.
by Ian Culley
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
The US dollar can’t catch a bid.
Since briefly reclaiming its November highs last month, it’s been nothing but down and to the right for the US Dollar Index $DXY.
Many global currencies have reacted by catching higher – especially the euro. But commodity-centric currencies – like the Canadian and Australian dollars – have had a more muted reaction. We think that’s likely to change in the coming weeks and months.
With interest rates on the rise around the world and crude oil prices pushing above 90, we think it’s just a matter of time before we begin to see some real strength from these currencies – especially if we see a sustained downtrend in the USD.
Today we’re going to highlight one of these forex pairs, as we think it’s poised for a major move. Let’s talk about the USD/CAD.
by JC
Music week continues here at Allstarcharts with a little R.E.M. today.
Yesterday we were wondering “What’s Going On?”, to quote the great Marvin Gaye.
So on today’s note, we’ll try to answer the question: Is this, in fact, The end of the world as we know it?
And for me, the answer is a big fat NO if these two indexes are above their 2018 highs: [Read more…]
No, not Santa. He already came and went.
JC came to Boulder yesterday (where I Iive) and we were able to get together to enjoy a late dinner. It was a great opportunity to reflect on how far we’ve come and what we’ve already accomplished.
All Star Charts launched about 13 years ago. And we launched All Star Options nearly four years ago.
During this time, we’ve seen big bull runs, panic-inducing corrections, and everything in between.
But the one constant has been [Read more…]
