From the Desk of Ian Culley @IanCulley

Currency markets have provided stellar trading opportunities this year. 

It isn't always this way.

Last year was rough. False breakouts and whipsaws were the norm, as most forex pairs and crosses chopped sideways in trendless ranges.

Many of those consolidations have now resolved, as currency markets have begun to trend again. And it’s hard to find a stronger primary trend to bet against than the declining Japanese yen. 

We’ve written about the yen multiple times in the past few months, pointing out that The Yen Provides the Base and joking that we could profit by simply buying Anything in Yen.

Today, we’ll follow up by outlining three tactical setups to bet on further yen weakness.

Boy do I have a treat for you today.

Last week I was a guest on the Investopedia Express Podcast with Caleb Silver and Kenny Polcari.

Kenny is known around wall street and the floor of the NYSE as the guy who would include recipes in his research notes.

How do you not already love the guy!

Caleb and I have also gotten to know each other well over the years.

So this was a ton of fun.

Between the market conversation, Kenny's recipe and Dex McBean rapping, this was one of the best podcasts to ever be a part of.

I think you'll enjoy this one:

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...

From the Desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to...

These days it seems like Energy stocks are acting strong regardless of whether there is strength or weakness in the broader markets.

I'm sure you've noticed.

The Long Energy trade remains in full force if the Sector Index $XLE is above those former highs from 2016-2018:

There's one major catalyst that can be a wrecking ball in a potential bull market for stocks.

What's going to stop a year-end rally?

I think if there's anything that can stop it, it's further strength in the US Dollar.

This summer, the markets have only reiterated the negative correlation between stocks and the US Dollar.

A little bit of dollar weakness over the past 6 weeks, or lack of progress to be more accurate, sparked a rally in stocks and crypto assets.

But as Dollar strength came back recently, the pressure on stocks and crypto has returned.

So let's take a closer look.

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

Back in early July, we were looking to buy a bounce in natural gas. Let's just say it was a success, as our target was hit within weeks.

But you have to remember the environment back then. Commodities had experienced a broad sell-off. And natural gas and agricultural contracts such as wheat and cotton had recently experienced drawdowns exceeding 40%.

It might have seemed like a tough call at the time, but for us it was clear. The risk/reward was in our favor as natty pulled back to test a key level. It was that simple.

Fast forward almost two months, and we’re back for more. Our risk is well-defined, and cyclical areas of the market are assuming leadership.

Today, I’ll share how we’re gearing up for a fresh leg higher in natty gas.

First, let’s take a look at the weekly chart of natural gas futures.

Regardless of the...

From the Desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that, which you can check out here.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

Click table to enlarge view

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month. 

Then, we sort the remaining names...

Have you taken a look at the new 52-week high list lately?

You're going to find a bunch of materials starting to pop up.

Here are 3 monsters who are helping to lead the way:

From the Desk of Ian Culley @Ianculley

Identifying trends is one of the most important jobs of a market technician. Regardless of our time horizon, we have to understand the general direction the market is taking.

It sounds simple, but it’s the foundation of any market thesis.

Once we have the underlying trend nailed down, we can focus on the areas of the market we want to exploit and pinpoint the best tools and strategies to do so.

When I think of the most critical trends to date, my mind immediately goes to interest rates. Rising rates and inflation have been the key drivers for two years now.

Despite some corrective action in recent months, the bond market has been reminding us that we’re still in a rising-rate environment.

Let’s take a look.

First, we have an overlay chart of the US 10-year breakeven inflation rate and the US 10-year yield:

As you would...

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 the Hall of Famers, the 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.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.