From the Desk of Ian Culley @IanCulley

"Buy stocks if the US Dollar Index $DXY trades below 105!"

Simple and straightforward. That was our roadmap back in early March.

Now, almost three months later, the dollar is putting that strategy to the test as it approaches 105 from below.

That multi-month consolidation with “continuation pattern” written all over it never continued lower.

Instead, the dollar index has chopped sideways within a tight range for almost six months. And the evidence is beginning to support a possible upside resolution…

The lack of broad US dollar weakness caught my attention back in April. 

Our G-10 currency index and US dollar advance-decline line were printing potential higher lows, while DXY was on the verge of undercutting pivot lows from earlier in the year. The divergence suggested burgeoning USD strength.

Interestingly, DXY has gained roughly 3.5% since.

The G-10 index is now posting a series of higher...

From the Desk of Ian Culley @IanCulley

All-time highs remain out of reach for gold bugs.

But not all is lost. In fact, I still see constructive consolidations on longer time frames. 

It’s messy. But I’m impressed with gold's and silver’s resilience as they twist and bend beneath supply.

But how low can they go before they break…

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

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...

You're hearing a lot these days about weakening market breadth.

But if you've noticed, those lies are only coming from journalists and other types of people with no formal training or experience in technical analysis.

That's like me pretending to be an expert in chess because I watched some people playing this one time in Washington Square Park.

If you think that the Equally-weighted S&P500 underperforming is evidence of deteriorating market breadth, you fall into this category of the misinformed and confused.

It's not a market breadth thing. It's simply a sector rotation thing.

In bull markets historically there's less of a need, or no need at all, for the safest stocks.

These defensive sectors include areas like Consumer Staples, Utilities, Healthcare and stocks with Low Volatility.

All of them made new 52-week lows on Friday relative to the S&P500:

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

Former resistance turns into potential support – and vice versa.

That’s Polarity 101. It’s a pattern found throughout the market. It doesn’t matter the asset class – Bitcoin or Berkshire. It’s simply human psychology at work. 

These levels often mark missed opportunities. And, in the process, they create price memory that fuels increased activity. Traders and investors are driven to transact at these levels, highlighting supply and demand zones that act as support or resistance.

Why does this matter right now?

Because gold futures have sliced through near-term support, careening toward a level etched in the minds of goldbugs everywhere…

I’m talking about the 2011 highs!

Gold futures recently undercut a key level marked by the February pivot highs and last month’s pivot lows – a polarity zone.

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

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.

Here’s this week’s list:

...

From the Desk of Ian Culley @IanCulley

"You can’t pay me enough to buy US Treasuries."

That’s the message from the bond market.

The result: a persistent rise in interest rates.

Classic intermarket ratios – copper versus gold, regional banks $KRE versus REITs $IYR, and the Russell 2000 $IWM versus the S&P 500 $SPY – all point to lower yields.

This has been going on for months. Some may argue that these ratios are broken or no longer carry significant insight into the direction of rates.

It may be true that the strong relationship between the above ratios and interest rates has indeed decoupled. 

But it’s not solely relative trends hinting at declining yields.

The stocks that benefit the most from a rising rate environment also look terrible on absolute terms…

The ProShares Equities for Rising Rates ETF $EQRR tells the story:

Financials, industrials, and energy comprise over 75% of EQRR. These market...

I’m a serial tinkerer with trading strategies, particularly in index options trading. In most cases, I’ll start with a simple concept and iterate from lessons learned along the way.

Each iteration is done with good intentions as I’m finding holes in the process and trying to fill them as I go along. I’m like a deckhand moving around the boat, patching small leaks with spackle.

This goes on for a while. And it happens slowly. But like compound interest, it grows stealthily… then mightily.

Unfortunately, I too often find myself in a situation where my PnL is going the wrong way and I’m suddenly handcuffed because I’ve created too many patchwork rules that are doing nothing now but causing confusion and slowing me down.

Then, frustration sets in.

There are only about 30 companies in the S&P500 that are bigger than what Nvidia is up after hours today.

That's a new all-time high for America's now 5th largest company. It's the first time it's able to breakout to new a all-time high since late 2021:

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...