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.

The list keeps on growing.

A month ago there was only 1 sector trading above its 200 day moving average.

Then a couple of weeks ago, there was a second.

And now there are 5:

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.

The Dow Jones Industrial Average is up over 5000 points in less than a month. That's almost an 18% ripper in your face.

How's it feel?

Was it as good for you as it was for me?

From the Desk of Ian Culley @IanCulley

For weeks, evidence has pointed to a top in the US Dollar Index $DXY.

Sentiment, volatility, and momentum thrusts have each suggested an end to the US dollar wrecking ball.

Despite the mounting evidence, price hadn’t indicated any significant weakness in the structural trend – until yesterday!

From the Desk of Ian Culley @IanCulley

The bulls are dropping the US dollar like it's hot – and risk assets worldwide love it! 

Few areas are enjoying the newfound dollar weakness quite like the metals space. It’s not just precious or base metals catching higher. It’s both.

So if you shelved those shiny rocks months ago, it’s time to pull them out and take a look.

Copper futures are up first:

Dr. Copper went out with a bang last week, posting its largest single-day return since 2009. We call these types of strong directional moves momentum thrusts. 

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 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

It’s been a lonely rise for interest rates.

The stocks and commodities that tend to accompany rising yields haven’t kept pace since early spring. Rates across the curve have accelerated higher, leaving these risk assets in the dust. 

But the seasons have changed – and the dust has settled. 

Cyclical value sectors have found their footing in recent months. Now, they’re playing catch-up.

One of the strongest market themes in recent weeks has been the reemergence of value over growth.

Check out the overlay chart of the 10-year US Treasury yield $TNX and small-cap value $IWN versus small-cap growth $IWO:

There’s a profound mental shift that happens when you flip from being in positions where bad luck could damage or ruin your trading account, to being in a position where the unexpected might actually make you a ton of money!

For options traders, an excellent example of these two positions is a short straddle vs. a long straddle.

In a short straddle, a trader is naked short an equal amount of calls and puts at the same strike and expiration. The PnL graph of a hypothetical 100-strike short straddle looks like this:

You’ll notice that as long as the underlying price (as displayed along the x-axis) stays +/- $20 from today’s price of $100, the trader will likely earn a profit as options expiration approaches.

In early October I was invited on to BNN Bloomberg where I was very clear in saying just how AGGRESSIVELY we wanted to be buying stocks.

See here: Buying Stocks & Fading Dollars (10-4-22)

That worked out well for us, and anyone else who was smart enough to follow along.

On Wednesday of this week I was invited back on to follow up on some of those comments.

Why was I so bullish?

Why was I ignoring all the noisemakers?

Because I'm a grown adult.

I don't need bedtime stories to go to sleep.

The Fed means nothing to my life. And it shouldn't impact yours either.

Here's what we're doing now:

From the desk of Steve Strazza @Sstrazza

We held our November Monthly Strategy Session Monday night. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

Guys, this is Technical Analysis 101.

You don't buy an asset that's just broken a level of support. If you do, you're only asking for trouble.

As technicians, we keep things simple, and we tell it like it is. We're not afraid to call something a piece of shit if that's what the data tells us.

I find a level of beauty in this process.

It doesn't matter how elegant your theory or big your I.Q. If the market is below a certain level, it's all wrong.