From the Desk of Ian Culley @IanCulley

So long, 2022. It’s been real.

With only a few trading hours left in the year, I’m ready to turn the page. I’m sure plenty of you can relate.

In the spirit of looking ahead to a bright and beautiful 2023, I want to share seven of my favorite commodity charts for January.

No grand thesis, just seven potential setups that have my attention heading into the new year.

1. Sugar

Sugar futures print a potential failed breakout after coiling within a tight range since the summer of 2021: The lack of upside follow-through accompanied by a bearish momentum divergence warrants caution.

From the Desk of Ian Culley @IanCulley

Have you checked out our new Gold Report?

We run through nearly 4o charts, breaking down the key levels and intermarket relationships, suggesting Gold could hit 5,000.

In this update, I’m going to share two of my favorite charts. 

Plus, I’ll reveal one mining stock setting up for a buy signal.

First, Gold outside the US presents a very different picture.

Yes, the USD dominates global trade. And yes, we want to witness a break to fresh all-time highs priced in US dollars. But when we look around the world at other major currencies, Gold has already broken out!

This is what Gold looks like when we remove the US dollar bias:

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Tuesday January 3rd @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Tuesday evening:

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 Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for the stocks showing 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.

From the Desk of Ian Culley @IanCulley

What a year for currency markets!

The USD/JPY tested its 1998 highs marked by the Asian Financial Crisis. The British pound revisited its all-time lows. And the euro fell below parity versus the US dollar for the first time in twenty years.

But where does that leave the King Dollar heading into Q1 2023 now that it has fallen almost 10% off its September peak and many global currencies have reclaimed key levels?

Let’s turn to the charts for some answers…

First, take a look at the US dollar index $DXY:

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended December 23, 2022. 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 that are seeing an unusual increase in investor interest.

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.

From the Desk of Ian Culley @IanCulley

Have you noticed commodities are breaking out?

No, not crude oil or copper. I’m talking about sugar, live cattle, and soybean meal.

Though these contracts rarely find themselves on the front page, their upside resolutions provide an important commodity-trading roadmap heading into 2023. 

Plus, their relative strength reveals insight into the underlying nature of the current market environment.

Check out commodity subgroup performances anchored from Sept. 26, when  the US Dollar Index $DXY peaked:

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 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.

From the Desk of Ian Culley @IanCulley

What do you do when the party gets out of hand?

You raise the roof!

That’s what the Bank of Japan (BoJ) did yesterday as its former yield curve control policies became untenable. After intervening to keep its 10-year yield below 0.25%, it shifted the ceiling to 0.50%. 

Naturally, the yen responded in earnest. It posted an explosive rally following the BoJ policy shift, gaining more than 500 pips against the dollar. 

But where does that leave the USD/JPY heading into 2023?

This is the video recording of the December 2022 Mid-month Conference Call.

We discussed: