You can pretend the bond market doesn't matter all you want.

But I'm here to tell you that this $115 Trillion + market that we call "bonds" is what's moving things around here.

It starts with credit.

If there is stress in credit, then you're going to see the implications across markets.

Internally, we were talking yesterday about the energy space and the recent pullback in prices. While still the strongest sector in the market in 2022, this move off the highs has been notable.

Is the trend over? Or was that just the "hot money" taking profits?

I'm not sure we have a definitive answer to that question yet. It looks to me that the market is still sorting that out. And this condition of indecision, coupled with high implied volatility priced into options is combining into a nice opportunity to collect some options premium while energy figures itself out.

So we're going to wade into the energy pool with a delta-neutral short-premium options trade.

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

Today’s Hot List is a short one.

Patrick S. Barrett, executive vice-president and CFO of OceanFirst Financial Corp $OCFC, revealed a purchase of approximately 10,500 shares in his own stock.

From the desk of Louis Sykes @haumicharts

One of the great features of technical analysis and classical charting is its universal nature.

Technical analysis is a proven value-add regardless of which asset class you're analyzing, be it equities, commodities, bonds, or even the emerging world of digital assets.

Markets are incredibly sophisticated, with many moving parts. A big misconception about technical analysis held by novice proponents is that fundamentals are of no use.

It's quite the opposite. Fundamentals drive markets.

Particularly when it comes down to long time frames, markets are driven by fundamentals and macroeconomic factors.

On the other hand, technicals help us profit in the direction of those fundamentals. 

Over shorter time frames, markets are driven by speculation and significant players. As a result, technicals and order flow are important to emphasize over these time frames.

Under these conditions, smart players with a lot of size push prices to maximum pain thresholds of the so-called "dumb money."

Many times, you'll see this manifest in...

From the desk of Ian Culley @IanCulley

In almost every market environment, there are assets we want to buy and assets we want to sell. That holds even when we think the only option is to sell.

Recently, the strong buys have been in commodities and cyclical areas of the market, while bonds and the major stock indexes have sold off. That's dramatically changed in recent weeks, though.

Now, all the major asset classes –  bonds, stocks, and commodities – are under pressure, as bears come for the leadership groups. It seems nothing is immune to bearish price action these days. 

Despite the broad selling pressure, there's still an asset we want to buy: the US dollar. That’s right, the good old greenback! It’s one thing the bears can’t seem to crack.

If we think about it from an intermarket perspective, a defensive bid for dollars makes sense given the downside pressure on risk assets across the board. We don’t think it’s a coincidence.

Regardless, the USD is strong and shows no signs of changing anytime soon. 

Last week,...

From the desk of Willie Delwiche.

Identifying recessions is an academic exercise for historians. It usually requires the passage of time to gain the necessary perspective. The December 2007 business cycle peak was not identified as such (by the NBER) until December 2008. While June 2009 would eventually be identified as the business cycle trough, NBER did not make this determination until September 2010.

For those allocating capital in real-time, this becomes more than just an academic discussion. Whether the economy is in recession or not can impact the length and severity of bear markets. Bear markets that occur independent of recession tend to last 7 months, with an average peak-to-trough drawdown of 23%. If there is a recession involved, bear markets tend to last for well over a year and the average pullback is 33%. The recession question was a hotly debated topic in early 2008 and there are certainly echoes of those conversations now. 

The Fed and other central banks are still aggressively raising rates even as growth slows dramatically. Manufacturing and New Orders indexes from the Richmond Fed (showing...

We've adjusted a position in the Paid-to-Play portfolio today:

The largest insider buy on today’s list is yet another Form 4 filing by Warren Buffett’s Berkshire Hathaway $BRK.A.

Buffett just revealed an additional purchase in Occidental Petroleum $OXY, as he continues to build his position in the energy stock.

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Tuesday July 5th @ 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 evening:

Is the market out of the woods yet? No.

Is there a change in trend with the most recent bounce bank in the indices? No.

Are some areas of the market doing better than others? Yes.

Are we here to discuss one such sector today? You bet we are!

We've been pounding the table about the strength that we've been noticing in the Auto space for over a month now. With that trend becoming more and more clear, we have a few more names joining the leaders. The Auto sector is exhibiting strengths that cannot and should not be ignored. Read on to know more!

First up, let's take a look at the index chart and focus on the levels here. 10,400 has acted as a crucial zone of support during the past five months of whipsaw moves in the market. The index continued to hold on to these levels even as other sectors were giving up on their floors without a fight. That was our first sign of relative strength.

The index has since bounced back and is currently trading close to 11,580. The next level to track here is the 2018 high level near 12,130. It will be quite interesting to see how the price...

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow the Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.

Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they're doing so for one reason only: because they think the stock is about to move in their...