From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

King Dollar is reasserting its reign at the expense of major global currencies and risk assets.

What started as a potential failed breakout last month is proving no more than a hard retest, as the US Dollar Index $DXY broke to fresh 20-year highs yesterday.

Even the most resilient currencies, such as the Canadian and Australian dollars and the Mexican peso, are losing ground against a surging USD.

As we’ve pointed out, this is not an ideal scenario for risk assets – particularly stocks.

Yesterday’s price action was a great example – dollar up, stocks down. 

This is not a coincidence.

Let's zoom out and analyze the dollar’s recent strength and then discuss what it means for these other asset classes.

Here’s a daily chart of the US Dollar Index:

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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.

They’re doing so for one reason only: because they think the stock is about to move in their...

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest Under the Hood column where we'll cover all the action for the week ended June 10, 2022. This report is published bi-weekly and rotated with our Minor Leaguers column.

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.

Watch this video for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large...

From the desk of Steve Strazza @Sstrazza

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:

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From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Don’t fight trends. It never ends well.

Learning to go with the flow often comes with age and experience. Lucky for us, we have plenty of both at All Star Charts as the current cycle isn’t our first rodeo.

We’ve been pounding the table on the energy trade, gracefully accepting all of this inflation and the outrageous prices at the pump.

What can we do about it? 

We can own the strongest commodities that continue to benefit from this inflationary environment. It’s really that simple. 

Let’s take a look at one of them now.

Here’s a zoomed-out chart of live cattle futures:

Last August, we covered live cattle, anticipating a breakout from a multi-year consolidation. Price chopped around the upper bounds of its range for a few months but ultimately resolved higher, completing a large basing pattern.

Whenever in doubt, zoom out!

That's how I learned it. Mostly the hard way.

And that's something we like to do once a month, is really zoom out.

Monthly Candlesticks are great for that!

During this month's review I really noticed how much stronger some of the European Indexes were. Especially this one here:

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley  

The Japanese yen continues to be front and center, as the safe-haven currency can't seem to find its footing.

In a market where risk assets are struggling to catch any sort of sustained bid, finding investment opportunities in yen has been a great strategy. It continues to work.

Long USD/JPY has been one of the best trades on the sheets this year – by far! And it looks to be continuing its upward trajectory, as it hit fresh 20-year highs earlier this week.

Aside from providing a stellar trading opportunity, the current intermarket relationship between this forex cross and the bond market may reveal the near-term direction of the US 10-year yield.

Let’s take a look.

Here’s an overlay chart of the USD/JPY pair and the US 10-year yield with a 26-day correlation study in the lower pane:

These two charts have followed similar...

When the worst stocks in the world can't go down, what does that say about current market conditions?

Granted, I'm more into breakouts above horizontal trendlines than diagonal ones, but as Steve Strazza told me yesterday, "of course, but one comes before the other".

When you're right you're right Mr. Strazza.

Here's that breakout we were discussing:

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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey...

It's been a minute since we've put some delta-neutral credit spreads on. And while VIX is off its highest levels of the year, there is still plenty of elevated premium in pockets.

The team here at All Star Charts has been monitoring the elevated options premiums in the Consumer Discretionary space. The $XLY ETF has been persistently hanging around the top of our implied volatility lists for the last couple of months. We talked about it yesterday during the @allstarcharts live twitter spaces chat.

And I like having a few delta-neutral trades on to provide some portfolio balance against my bullish and bearish directional bets in individual stock names. So $XLY is providing us a good opportunity to collect some income.

I lived on 55th Street on the East side of Manhattan for a while.

To get some exercise I would often run along the East River and many times I'd run across the 59th Street Bridge over to Queens Blvd, and back.

It wasn't a long run, but it got me going and would get me away from my screens for a bit.

Exercise was part of my "support" system during some of those rougher years.

On the way out to Queens you go over Roosevelt Island (which is a really weird place btw). And then you have Queensbridge over to your left directly north of the 59th St. Bridge.

For those unfamiliar, Queensbridge is the largest housing project in North America.

It's where Nas is from, arguably the greatest rapper of all time. I personally don't make that argument, but I can see how you could (he's in my top 5).

There's a famous diss track that Nas titled "Ether".

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

The Japanese yen continues to slide.

In early April, we highlighted the multi-year base in the USD/JPY cross. We were anticipating a significant breakout based on the broad weakness in the yen.

Even gold, one of the worst performing assets, looked strong denominated in yen.

We went so far as to title the post Anything in Yen.

Funny or not, it was true.

Not long after the post, we got the breakout we expected. And, two months later, the USD/JPY is kicking off its next leg higher, printing fresh 20-year highs.

Let's take it a step further and outline some trade setups in other currencies denominated in yen.

Remember, everything and anything seems to work priced in yen these days.

First, a quick revisit of the USD/JPY chart we shared in April. Here’s the updated version:

After retesting its recent breakout level near 126, the USD/JPY pair has...