We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

All eyes have been on the US dollar and interest rates in recent weeks.

Last week, we saw a timely kick save from the bond market as the 30-year reclaimed its summer lows. Whether the latest rebound in rates will hold is yet to be seen as the 10 and 30 are currently chopping sideways just above our risk levels. We’re watching the long end of the curve closely to see how yields react at these critical levels.

But what about the US dollar?

When we analyze the US Dollar Index $DXY, it’s hard to be bearish, as price is consolidating in a tight continuation pattern following a base breakout and swift leg higher last month. As usual, the direction in which the DXY resolves will have broad market implications and will affect risk assets around the globe.

We know you’re probably tired of hearing it, but this is another big week for markets -- especially the dollar!

As investors brace themselves for...

From the desk of Steve Strazza @Sstrazza

On Monday night we held our December Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

From the desk of Willie Delwiche.

Key Takeaways:

• Yield curve flattening in anticipation of rate hikes
• Elevated inflation usually weighs on economic growth and financial market performance
• Markets have grown unaccustomed to global interest rate hikes

Federal Reserve policy is in a period of transition and this week’s FOMC meeting will provide some clarity as to the speed with which Powell is choosing to pivot. From beginning to taper the rate at which it has continued to expand its balance sheet, to accelerating the pace of that tapering process to actually raising interest rates (likely some time in 2022), pressure is building for the Fed to fight inflation with deeds, not just words. The yield on the 10-year T-Note continuing to move sideways suggests that either inflation, if not as transitory as some had hoped, is not yet as deeply embedded as some fear or in fighting inflation the Fed will derail a recovery that remains fragile. 2-year yields are pricing in action by the Fed sooner rather than later and the spread...

The simple fact of the matter is these last few weeks have been an environment of low liquidity where we've had little to no conviction in maintaining aggressive long crypto positions.

There's zero edge in trading right now, on either the long or the short side. Sitting out this messy price action is the prudent strategy, in our view.

Bitcoin is still below 53,000 and likely needs to contract and build out a base for at least another few weeks. We're more than happy to pay a higher price for an entry with greater conviction. This has been the case for the last two weeks, and there's nothing to provide updates on.

We talk a lot about relative strength around here.

"Which are the strongest stocks and sectors?"

"Buy high and sell higher!"

"What's on the new 52-week high list?"

"How many new highs are we seeing?"

These are all questions we're regularly asking. Like every day.

But at the same time, it's important to understand what's not working. And what are the implications of those things not working?

There are two main groups on my radar.

This is the video recording of the December 2021 Mid-month Conference Call.

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 direction and make them money.

Then we flip through our list of stocks flashing unusual...

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest Under the Hood column where we'll cover all the action for the week ended December 10, 2021. This report is published bi-weekly and rotated on-and-off with our Minor Leaguers column.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

Watch this video for a "behind the scenes" look at our process...

From the desk of Willie Delwiche.

Key Takeaway: A surge to new highs can leave stocks out of breath. S&P 500 at an all-time high while more NYSE stocks make new lows than new highs. FOMC meeting likely to feature Fed grappling with surging inflation.

• The Technology sector remains at the top of our relative strength rankings. While mega-cap leadership is helpful, sector strength goes beyond that. It is the top-ranked sector from an equal-weight perspective as well as among small-cap sectors. This is also reflected in our industry group heat map, which shows strength out of the Hardware and Semiconductor groups across market cap levels.
• Consumer Staples saw a big jump in the rankings this week, and there is plenty of improvement within the Food & Staples Retailing and Household & Personal Products groups within the sector.

With the S&P 500 wrestling with the 4700 level, I've been turning my eyes to some of our more favorable bullish setups.

On Friday, the ASC team published their latest International Hall of Famers List report. This list is composed of the 50 largest US-listed international stocks or ADRs. The team takes the 50 largest names each week and then applies technical filters in a way that the strongest stocks with the most momentum rise to the top.

The name from this list that caught my attention just saw a dramatic collapse in options volatility, making call options cheaper. And with the stock above the trigger level, it's time for us to get involved.

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Struggling With Supply

When we zoom out and look at structural trends there are bases everywhere. This is true for all risk assets, not just stocks, and we’re seeing it on multiple timeframes. Some international indexes are consolidating beneath their dot-com bubble highs from over 20-years ago. Many others, like Emerging Markets and the MSCI World Ex-US index, are currently churning beneath their 2007 highs. Then there is crude oil and small-cap financials (shown in the chart), which are just some among the long list of charts that are still consolidating beneath their 2018 highs. This is a critical level because it is when risk peaked around the globe during the last cycle. Last but not least, there are a lot of stocks and commodities that are currently digesting last year's gains beneath their 2021 highs. The point is that risk assets are still dealing with a lot of overhead resistance, and this is true across...