Bonds & Commodities. That's what the stock market bulls still have left.

But why do Futures matter to stock traders and investors?

Because the bond market and commodities market combined are waaaaay bigger than the stock market.

It starts with the information we're getting from futures markets, and then it trickles down to everything else from there.

With the stock market losing key support in the Nasdaq, S&P500, Small-caps, Transports and Bitcoin, what's left?

I think these 2 are what the bulls have left....

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

The bull market for commodities is alive and well. They were the top-performing asset class last year, and they’re kicking off the new year with a lead once again. 

The energy-heavy CRB Index is printing new seven-year highs, and our ASC Equal-Weight Commodity Index just resolved from a nine-month base to its highest level since 2013.

To take advantage of this area of leadership, we’ve been highlighting strength and outlining long ideas in a variety of commodity markets.

We know not everyone has access to the futures markets, and that’s OK, because there are plenty of opportunities to express a bullish thesis on commodities through the equity market.

To make this easier, we’ve put together a universe of stocks that offer investors exposure to a wide array of different commodities.

Let’s dive in and talk about some of them.

Here’s our Natural Resource Stocks table:

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:

...

Asset prices trend. We know that.

It's why technical analysis works.

Price changes for stocks, rates, commodities and even crytpos move in trends. They're not random.

We know this. It's not a secret.

So we should respect the behavior of the market. Not stick to narratives the lead to poor risk management.

From the desk of Steve Strazza @Sstrazza

Tuesday night we held our January Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

We're putting on an $SMH March 265/270/320/325 Iron Condor for an approximately $2.15 credit.

This means we’re short the 270 puts and 320 calls, while protecting our position $5 away on both sides with long 265 puts and long 325 calls. We’ll be doing the same number of contracts at all four strikes to keep the risk even.

Check out our short video with the thought process behind these trades:

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

There have been some fireworks to kick off the new year. One of the biggest developments in 2022 has to be the US 10-year yield breaking to its highest level in two years.

The direction in which yields resolve from their 2021 consolidation will impact all the major asset classes, including bonds, stocks, and commodities. We’re already seeing procyclical assets catch an aggressive bid as the 10-year flirts with an upside resolution.

For now, the path of least resistance is higher. But we still need to see follow-through and confirmation before we can be comfortable that these new highs are here to stay.

When we look at the international bond market, it’s not just domestic Treasury yields that are on the rise. We’re actually seeing rates make new highs all across the developed world.

This is bullish confirmation of what we’re seeing domestically, as it suggests the current rising rate environment is a global...

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...

Even within this disastrous decade for Precious Metals, Gold Miners have still found a way to outperform whenever they get down here.

Look at this chart of Gold Miners $GDX relative to the S&P500. The last 2 times they got down here, it sparked periods of tremendous outperformance:

Big day today! I got Josh Brown to come on the podcast and talk about all things Technical Analysis and Financial Markets. Josh is probably friends with more Technicians across the country than almost anyone else. He respects what we do, and even works in some trend following systems at his own firm. We discuss all of it!

In this episode we talk about Sector Weightings in Markets, how RIAs can bring Crypto to the portfolios of their clients and why Gold peaked 40 years ago when adjusted for inflation.

We don't always agree on things, but that's what makes this fun.

Josh and I battle it out in this one. Give it a listen and let me know what you think!

Also make sure to Subscribe to Josh's Youtube Channel: The Compound RWM

Enjoy!

While the US Stock Market has pulled back a bit this week, we've seen $VIX pop its head back up above 23 and print its highest levels in a month. And this isn't entirely surprising given that the highly watched Russell 2000 $IWM has been struggling to hold on to its yearlong support level of around 210.

But has the "all-clear" signal for the bears fired? Is it time to pile in short? We're not convinced yet.

Meanwhile, we've seen some pullbacks in semiconductors stocks we own ($NVDA and $MU most notably) that may get us stopped out soon. But when we zoom out to the bigger picture, as seen via the $SMH Semiconductors ETF, we see that we've been in a range for quite some time now. And even if we'd lose the support of this recent consolidation range at around 290, we can expect the 270-275 zone to offer a new level of support:

In recent weeks, we've been making a point about the importance of the derivative markets. When leverage and open interest is as elevated as it currently is, futures markets tend to govern short-term price action.

One of the most effective metrics to gauge this data is through funding rates.

Not only do we use this data to get a read of the positioning of speculators to help shape our macro crypto thesis. We can also use it on a case-by-case scenario to find high-conviction short and long setups within the alts.

Let's start by addressing the question of what is a funding rate.