Commodities are losing ground as money flows back into stocks and bonds in hopes of a Santa Claus rally.
Yet fresh strength in equities isn’t completely leaving commodities in the dust. In fact, numerous bullish developments are underway for raw materials.
Dr. Copper is working its way higher. Crude oil is refusing to throw in the towel despite increased selling pressure. And softs such as orange juice, cocoa, and sugar are flying toward fresh decade highs.
That doesn’t sound bearish to me, especially when considering new buying opportunities in the grain markets…
First, check out the stock-to-commodity ratio:
The S&P 500 $SPY is violating a multi-year downtrend line relative to the CRB Index, signaling a potential trend reversal underway.
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. Click here to check it out.
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 by their proximity to new 52-week highs.
Bond investors must feel like it’s their lucky day.
Long-duration bonds are reaching new multi-month highs!
It finally looks as if a tactical bounce is underway for these safe havens-turned-risk assets…
The Treasury Bond ETF $TLT is coming off extreme oversold readings on the 14-day RSI, highlighted in the lower pane:
Over the past two years, oversold conditions at these levels have coincided with near-term bottoms for long-duration bonds.
Based on the chart, TLT looks poised for a mean-reverting rally.
Let’s zoom in…
Check out the daily chart carving out a potential six-week reversal formation:
I like trading TLT from the long side toward 99 -- but only if it holds above the October pivot high at approximately 88.25. That’s the line in the sand.
All bets are off if it slips below those former highs.
The dollar has gone from slinging cheese to lobbing cookies.
Sellers finally got ahold of the US Dollar Index $DXY on Tuesday, sending it on its steepest single-day decline since October 2022.
Recall what followed for the dollar…
The DXY formed a major top and fell victim to not one but two subsequent 1 percent-plus daily drawdowns.
Check out the DXY chart with the one-day rate-of-change in the upper pane:
The DXY dropped almost 1.5% during Tuesday's session. That’s a huge move for a currency (with the exception of the Turkish lira and perhaps the Polish zloty).
Based on the action witnessed last fall, it wouldn’t be surprising for the DXY to experience a reprieve from selling pressure in the coming days, followed by renewed downside action.
As I mentioned last week, “If and when it (the DXY) falls below...
Today, a "darling" company in the media thanks to new obesity drugs and other good news hitting the media airwaves is selling off. In fact, its having its worst day relative to its sector peers in many years.
Someone forgot to tell Eli Lilly $LLY that a new bull market run may recently have gotten under way. Of course, it was already way ahead of the game. In fact, look at this long-term chart:
These aren't usually the trends I like to take the other side of.
But perhaps it's gone on a little too long and it's ready to pause and retrace?
This stock could get cut in half and the long-term trend would still be intact.
When we zoom in a little closer, we see a very notable (and sizeable) gap from this summer where the stock jumped from $450 per share to north of $500 per share overnight:
Welcome back to Under the Hood, where we'll cover all the action for the week ended November 11, 2023. This report is published bi-weekly and rotated with The Minor Leaguers.
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 seeing an unusual increase in investor interest.
Click here for a behind-the-scenes look at our process.
Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply...