From the desk of Steve Strazza @Sstrazza

We held our January Monthly Strategy Session Tuesday night. 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.

It's the weekly bond market edition of What the FICC?

Today we're highlighting potential failed breakouts in European benchmark rates.

Check it out!

From the Desk of Ian Culley @Ianculley

Whether you’re looking across the curve or around the world, interest rates continue to rise.

Benchmark rates in Germany, France, Spain, and Portugal hit fresh multi-year highs last week. Interestingly, the US 10-year yield did not. And neither did the two-, 5-, or 30-year yields.

I’m not claiming US yields have put in a lower high. It’s far too early to assume that. A downside resolution below last month’s pivot lows needs to materialize before making that claim.

Nevertheless, the lack of confirmation from US interest rates is intriguing, especially as European yields turn lower this week.

Check out the triple-pane chart of Developed European 10-year yields (Germany, France, and Spain):

All three broke above their respective Oct. highs, finishing 2022 on a high note. But those breakouts were short-lived as yields are sliding lower this week. 

The lackluster moves from European yields suggest...

From the desk of Willie Delwiche.

The new year can bring the hope of a better market environment. While it can be tempting to draw conclusions about all of 2023 from how December closed and January has begun, we would counsel patience. One lesson from 2022 is that normally reliable indicators of strength can be distorted in elevated volatility environments. The evidence has not improved and caution remains warranted. The liquidity environment remains poor, last year’s pattern of lower lows and lower highs is intact and the trend in the net new high data has not improved. Across asset classes, and both in the US and around the world, uptrends are hard to find. Gold, though, is starting to shine.

Our Weight of the Evidence Dashboard fills in the details and includes a few charts that have our attention heading into 2023.

Have you ever resisted something?

Ok, that question answers itself. Of course you have. We all have.

For our purposes today, I’m more specifically focused on the periods when we resist something that deep down we know would be good for us. Or the right thing to do. Or the intelligent thing to do. Or the helpful thing to do.

When nothing but goodness can result from taking a specific action, why do we resist it? Why do we willingly sabotage ourselves like that?

Author Steven Pressfield in his bestselling book...

From the Desk of Kimmy Sokoloff

This market can't seem to get out of its own way.

Just when you think it can head uphill, we have a rug-pull.

Today it was data out in the morning that pushed the indices lower.

Another Santa Claus Rally is officially in the books.

This year the S&P500 rallied 0.80% during the period, which is more than 3 times the historical returns for all the other 7 day periods throughout the year.

You can learn more about the SCR in this note from last month.

OK so great, Santa showed up. So what?

The next new position in our Paid-to-Play portfolio is:

We've said it time and time again.

It's all about the US dollar!

When did the NYSE new highs list peak? When the dollar bottomed...

When did equities bottom? When the dollar rolled over...

It's not rocket science.

I don't care why it's the case because the correlations are so evident. It's a fundamental reality in this tape: A weak dollar is positive for stocks and crypto, while a strong dollar pressures those assets.

Now, consider: What have been the defensive assets in this market?

The Japanese yen? Nope.

Gold? Not until recently.

Bonds? Hell no.

Whenever shit's hit the fan, that money has flowed into the US dollar.

It ain't rocket science, folks.

From the Desk of Kimmy Sokoloff

Futures are up a tad this morning.

What I'm looking for is $SPY to push past 386 and head to 387.80.

Support is at 382.70.

Today’s Hot List is a short one.

The only 13D on our list was filed by Impactive Capital LP, which revealed an increase in ownership from 7.20% to 7.50% in Envestnet $ENV.

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...