This is a major development in the forex market. And when we look under the hood, things are even worse than they appear for the greenback.
With more and more global currencies showing relative strength each day, it’s time to take a look at US dollar internals and see what’s moving.
Relative strength is not just the cheat code for stocks, it also works for the currency market and everything else in between.
We also learn a lot about the breadth of a given market through analyzing internals. This helps us determine how we want to position ourselves to make money.
And right now, it looks like we should position ourselves for a lower dollar over longer time frames.
The following table shows the US dollar is in, or moving toward, a bearish trend regime against most other major currencies.
As you can see, over 60% of currencies are in uptrends against the dollar… and this is now true onevery timeframe we analyze.
The worst stocks on the planet. Yes those. They're even buying those.
That's what happens in bull markets.
The CSI 300 is up over 4% overnight. This is the Chinese equivalent to the S&P500, which is now bouncing off support from Q1 and potentially putting in a historic double bottom:
Think about what this could mean to global markets, if even the worst stocks can't go down.
I mean, just look at the returns in China compared to the United States over the past 4 years, taking it back to before the prior cycle's peak.
Using this timeframe, you can really see the lack of recovery in China.
And I'm not just cherry picking the CSI 300 here.
It's just that this index is a good representation of the Chinese Market.
But if you want to compare that to the more popular China ETFs, you'll see the same thing, or worse.
While the CSI300 and China Large-cap 25 Index $FXI are only down 26% for this period, the China Technology ETF $CQQQ is down double that. So is Chinese Internet ETF $KWEB.
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.
Nowadays, 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 new highs in order to focus...
The world's important stock market index just made new all-time highs, again.
We don't know what the market is going to do next. No one does.
But here's what we do know.
Going back and looking at all the data since the beginning of time, we know FOR A FACT, that there is nothing more bullish for a stock than the price going up.
We know.
We have the data.
So do you!
But have you gone back and actually taken the time to count?
The most bullish thing a stock can do is go up in price.
Here is the Dow making new all-time highs (in price), after breaking out earlier this year from a multi-year bear market.
People keep looking for bear markets that aren't there.
We just had a bear market a couple of years ago.
And we had another one a couple of years before that.
If we're going into a new bear market, you're going to need stocks to go down in price first, or at the very least they need to stop going up.
We know mathematically that you CANNOT have a bear market, or a correction of any kind without the prices of stocks falling. (See: ...
We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.
However, when it comes to this one, it couldn't be any simpler!
With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.
Welcome to TheJunior Hall of Famers.
This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.
The bottom line is it is a bull market. We want as many vehicles and...
If I learn something from someone and I quote it, I always do my best to also mention who I learned that from.
When someone on my team makes a good call, or builds something really valuable, I'm the first one who stands up to give them credit for it.
But this one is mine. I'll take the credit for this list.
Here's the thing though. While I did think building this would be a good idea, it has exceeded expectations across the board.
I may have made a good call. But I'm still a dummy for not realizing just how valuable this would end up being for us.
The market is humbling that way.
Without any further ado, let me present you with the All Star Charts Hall of Famers.
These are the largest 150 companies in America by market-cap. These are the stocks that are driving returns. These are the names that need to do well if you want your favorite indexes to do well too,
You guys know how much I appreciate the value we get from the Dow Jones Industrial Average.
But there are other names that are arguably just as important, or in many cases even...
It has been over 1,600 days since Crude Oil futures traded below zero in 2020, which preceded one of its best 2-year bull markets in history.
Since the peak in early 2022, energy has been a tough trade for those with trend-following strategies and a favorable one for mean-reversion strategies.
Crude Oil futures are at the lower bound of a multi-year range, and the Energy Sector SPDR $XLE has the fewest percent of stocks above their 200-day moving average out of all 11 sectors.
Energy has been a laggard recently.
However, it's important to remember where energy has come from. Crude Oil futures went from below 0 to 130 in less than two years, and the XLE is the second best-performing sector since Covid, lagging only Technology $XLK:
The outperformance has been in the energy sector. Just not recently...
But that could be changing soon with energy futures digging in at major levels of interest.
Crude Oil futures are bouncing off a key level of polarity:
We just got done with our Fall Portfolio Accelerator in Chicago.
It went even better than expected.
I think we're going to make so much money from the ideas and strategies we discussed over the past two days.
It's not even fair to have so many smart traders and investors in one room. Not to mention, we also got to go to the Cubs game last night, the CBOT on Wednesday and a tour of the Pat Tillman Foundation as well.
All around I think it was a huge win for all of us. Our entire team got to fly in from all over the world to spend some time in Chicago, many of them for the first time.
We had some special guest rock stars come by to drop some...