From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

The bullish picture still lies as a structural backdrop.

But now, we're seeing mixed signals as many areas have become increasingly vulnerable in recent weeks. This is all taking place as defensive assets have found a footing for the first time in over a year, while risk-on assets approach logical levels of supply.

Recent weakness has been particularly isolated in former leadership groups, like Small-Caps and Growth-heavy areas. 

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. We can then put these near-term developments into the context of the big picture and glean insights into the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

From the desk of Steve Strazza @Sstrazza

Our Top 10 report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Smalls Signal An End To The Growth/Value Countertrend

One of the main themes we’ve seen unfold as the market has rallied off its recovery lows from last year is the rotation into value stocks and more cyclical areas of equity markets. We’re seeing it around the world too, and it’s also responsible for driving many other relative trends like that between small and large-caps and US vs ex-US equities.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest "Minor Leaguers" report.

We've already had some great trades come out of this Small-Cap focused column since we launched it late last year and started rotating it with our flagship bottoms-up scan, "Under The Hood."

Ultimately, to make the cut for our Minor Leagues list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.

Then, we simply sort by proximity to new highs in order to focus on the best players only.

From the desk of Steve Strazza @Sstrazza

Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to longer-term minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.

We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

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

Commodities continue to rip higher. 

Copper is breaking out to new all-time highs. Soybean Oil is trading at its highest levels in over a decade. These moves come as Grains, Lumber, and Base Metals have resumed their near-vertical ascent over the past couple of weeks. 

But risk assets hitting our price objectives or running into logical levels of supply are key themes playing out across the market right now.

As many commodities approach key levels of potential resistance, it raises an important question…

Will sellers step in as they have in stocks?

Let’s look at some charts that could provide valuable information for answering this question.

First up is Aluminum Futures:

From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley.

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

For these calls, we really take a step back and put things in the context of their structural trends by focusing only on Monthly charts. This is easily one of our most valuable exercises.

In this post, we’ll provide a summary of the call by highlighting three of the most important charts and topics we covered along with commentary on each.

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

The first step in approaching any market is to identify the primary trend.

Is price going up, down, or sideways? Simple!

But it's easy to lose sight of the long-term trend sometimes, especially if you don't zoom out enough. This is why our process of looking at monthly candlesticks is so important. It literally forces us to take a step back and focus on the structural trends at play.

And that’s exactly what we did in this week’s Currency Report. When looking through all of our monthly charts, the big picture view of the US Dollar / Swiss Franc pair really stood out. We're going to discuss it in today's post.                                          

From the desk of Steve Strazza @Sstrazza

When running through some scans this morning two new stocks came on our radar from our Under The Hood universe. 

You can read our most recent report here. It was just published Monday.

Today, we're going to discuss an Industrial conglomerate and well-known household name, as well as one of the largest Natural Gas companies in the world.

Not only are these stocks in some of our favorite sectors right now, but both are currently flirting with reclaiming key former highs. They also offer clearly defined risk levels to trade against, in addition to profit profiles skewed heavily in favor of the bulls.

We'd be remiss not to share these setups with you, so let’s dive right in and look at them…

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize it objectively.

While you can try to guess the chart, the point is to make a decision…

So let us know what it is… Buy, Sell, or Do Nothing?

It sure feels like a long time ago now, but it's been less than a decade since the European Union underwent a rather serious sovereign debt crisis.

This set off a roughly two year bear market for International Stocks as well as a rangebound mess for US stocks.

After this bout of volatility, most risk-assets carved out significant lows in 2016 and rallied higher until global risk peaked in 2018. Then it all fell apart again last year.

This brings us to today, where we're now seeing European countries and indexes trade right back up to their 2018 or pre-COVID highs left and right.

While diversified global indexes like MSCI EAFE $EFA and MSCI Europe $VGK recently reclaimed their former highs from 2014, 2018, and are already well above their pre-COVID peaks - they are now approaching a far more important area of overhead resistance at their pre-financial crisis highs.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood” column for the week ended April 30, 2021. This column is published bi-weekly and rotated on-and-off with our Minor Leaguers column.

In this column, we 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.