This week I had a great conversation with Jeremy Schwartz on the Behind The Markets Podcast on SiriusXM Radio.

Jeremy and I have been through a few cycles throughout our careers and probably understand the weightings of Indexes and ETFs better than most investors. Which was a big point I was trying to make: Understand what you own. You need to know what's inside of these things, and more importantly, what's not.

There's a lot going on in today's market but I tried to really focus in on the primary trends and where I think we're going this year.

Last time we did this I got to go down to the studio at the Wharton School at the University of Pennsylvania. But the weather was bad so we recorded remotely. Hopefully I can make it down there soon and we can do it live from the University once again.

Either way, I think we hit on a bunch of key points on this episode.

Hope you enjoy!

It's Saturday Morning Chartoons time. 

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.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

From the desk of Steve Strazza @Sstrazza

For most of my career, I've listened to fundamental analysts make the argument that investors should be overweight international stocks because they're "cheaper" than US stocks.

This has been the case for a long time now, and it's merely a function of the fact that there are far more value and cyclical stocks overseas.

But, since value stocks have been out of favor for so long, ex-US stocks have severely underperformed domestic markets.

Growth has been the place to be for the last decade, and for this reason the alpha has been with the tech-heavy US stock market over its global peers.

But now that we're seeing the tide shift in favor of value, we're also seeing early signs of reversals in the US versus the world relative trends.

There's still more work to be done before we have conviction that we want to favor international stocks, but the weight of the evidence continues to move in that direction.

In today's post, we'll discuss what we're seeing from these relative trends and then go over some areas of the global equity market that are likely to benefit from the value over...

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

Commodities are on fire!

Crude oil is trading above 90, its derivatives are printing fresh highs, and natural gas is beginning to rip – again.

But, as we’ve pointed out in recent posts, it’s not just energy that’s working. We’re seeing broad strength in commodity markets.

Soybean oil is marching higher along with the rest of the bean complex, and corn hit our initial upside objective earlier this week. 

Today, we’re going to outline another ag contract that’s setting up for its next leg higher: coffee.

Here’s a zoomed-out daily continuation chart of Coffee Futures $KCF:

Coffee has been in a strong uptrend since completing a multi-year base last spring. As you can see in the chart, this base...

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:

...

From the desk of Willie Delwiche.

By looking at various ratios relative to where they have been over the past year, we get a sense of investor risk appetite from an intermarket perspective. The pairwise comparisons in our risk off - risk on Range-O-Meter show a decisive tilt toward risk off assets over the past month. A few (Staples vs Discretionary, Large-Cap vs Small-Cap, Yen vs Aussie Dollar) are nearing new 52-week extremes favoring the risk-off side of the ratio. We could get some near-term relief from the intense selling of January, some of that has been seen this week already. But if we are seeing broad and sustainable strength, I expect it will be evident by a decisive move toward the risk-on side of our range-o-meter.

The team put out a piece this week titled Shorting the Long End of the Yield Curve.

I can't pretend to understand the first thing about interest rates, how or why they behave the way they do, nor how their moves in relation to each other mean certain things. Thankfully, I don't need to. I just need to follow price.

And right now, price is signaling loud and clear that we need to take a short position in some of these bond vehicles.

This is the video recording of our February 4, 2022, All Star Charts Crypto Weekly Strategy Session.

I’ve received a few questions from readers about playing bounces in some oversold stocks.

The most recent was Facebook, er… Meta (whatever).

An opportunistic trader hit me with this question:

Is anybody interested in taking a position in these heavily discounted calls in $FB today?

Discounted? Au contraire, mon frère.

Shares of $FB stock may be “discounted” after getting shellacked to the tune of -26% or so. But there are no discounts to be found anywhere on the options chain.

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 long-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 five to nine 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 and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

By...

This is the video recording of the February 2nd Weekly Town Hall w/ Willie Delwiche & JC Parets

02/03/22 2:00 PM ET

From the desk of Willie Delwiche.

It’s difficult to stay on top of things if you don’t periodically pause for reflection. 

What did you do yesterday that you want to do more of tomorrow? What do you want to do less of tomorrow? Rarely is any single day a make or break situation. But success over time is about leaning into the things that work and leaning away from the things that don’t work.

From an investing perspective, it’s about trusting prices and their trends. This involves tilting toward the parts of the market that are moving higher, while avoiding areas that are moving lower. It’s about avoiding “should” and dealing with “is”. The market is dealing with a negative reaction to disappointing data from several stocks that are in well-established downtrends as I type. That really shouldn’t be that big of a surprise. Stocks making new lows tend to be those in downtrends, while those making new highs tend to be those that are in uptrends. That’s the way the world works.

Last week I mentioned ordering seeds and starting to plan the summer garden. In addition to taking stock of what we had left from last year, we also had to...

Picture this.

One of your close friends asks you about technical analysis. What do technicians do? "What even is technical analysis?" they ask.

Your first instinct is to dive down the rabbit hole of charts, indicators, and intermarket analysis. After your rambling, your friend is even more confused than before they asked.

That's the common mistake, one of the primary reasons why technical analysis often gets such a bad rap.

In the same way you wouldn't describe geography as the study of seismometers or biology as the field of microscopes, you'd be selling technical analysis short by arguing it's the study of indicators.

You guys know me by now. I'm not exactly "Mr. Seasonality" where we follow seasonal trends tick for tick.

That's not how markets work.

BUT, I do think it's important to put things into context. In fact, 2021 followed seasonal trends better than any year in recent memory.

Take a look at last year's tracking of our Cycle Composite. That was right on point wasn't it?

We're buying the $CVX January 2024 150-strike call options. Yes LEAPS!

Check out our short video with the thought process behind this trade:

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...

From the desk of Steve Strazza @Sstrazza

We held our February Monthly Strategy Session Tuesday night. Premium Members can access and re-watch 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.

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

The path of least resistance is higher for yields, as the market continues to punish investors for buying bonds. 

As long as that’s the case, we want to look for short opportunities when approaching the bond market.

Since the shorter end of the curve has ripped higher, the moves in these contracts and ETFs are extended. They simply don't offer favorable risk/reward trade setups at current levels.

We’re better off looking for ways to play rising yields further out on the curve in this environment. 

We’re going to discuss how to do just that by covering a few charts that are setting up on the short side.

First up is the 30-year Treasury bond futures:

T-bonds are carving out a multi-year head-and-shoulders top above their pivot lows from last March.

We want to sell weakness on a decisive break below the neckline and those former lows at 153’07, targeting the 2019 lows around 136’16.

We can only be short on a...

From the desk of Willie Delwiche.

With the weight of the evidence turning neutral and our tactical risk management model arguing for more caution, we have reduced our equity exposure and raised some cash in our Cyclical and Tactical Opportunity Portfolios.