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

Last week, we touched on the weakness that’s been developing further out on the yield curve.

The long end simply hasn’t kept pace with shorter-term yields. This is understandable given the magnitude of the move in the 30-year since summer 2020. At some point, the shorter end of the curve needs to play catch up. And it’s done just that these past couple months.

Now it’s time to focus on longer-term rates, as further downside pressure will eventually put the current economic recovery into question.

Let’s put the recent action in rates into perspective as we head into year’s end.

Below is a chart of the US 30-year yield:

After testing a key level of former support turned resistance around 2.23, it’s slipped back toward its summer lows.

If the 30-year yield continues to fall and takes out its former lows around 1.78 that does not bode well for...

From the desk of Willie Delwiche.

Key Takeaway: The bulls are back as more and more investors begin to reach for risk. Optimism is expanding across investor surveys and active equity managers have increased their exposure to levels not seen since the beginning of the year. This fresh bout of risk-seeking behavior comes as both momentum and price trends have turned bullish. Also, participation beneath the surface is expanding as the major indexes reach record highs. Combine this backdrop with a healthy number of stubborn bears and we have an environment that supports the next leg higher.

Sentiment Report Chart of the Week: Appetite For Risk Returns

Investors are not just feeling more optimistic, they are doing something about it. NASDAQ trading volume, which fell by nearly 30% from March to October, has turned higher in recent weeks and is 20% higher than it was this time last year. Equity call option activity has also expanded as investors are stepping back up to the ‘risk on’ buffet after a multi-month...

Today's post has inspired today's musical soundtrack that is oozing out my speakers as I type this.

The Rolling Stones' album Exile on Main St marked a turning point in the trajectory of Rolling Stones lore.

And it feels fitting as today's trade idea has Main Street in its name and it, too, is exhibiting classic characteristics of a major breakout.

From the desk of Steven Strazza @Sstrazza

*** Click here to read the reveal post for this Mystery Chart ***

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 the price behavior 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?

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

Correlations often work... until they don’t. It’s just the nature of intermarket relationships.

We can see a prime example in the recent action between the US dollar and risk assets.

The dollar has been marching to the beat of its own drum, as it's shown an unusually strong positive correlation with commodities since this summer.

Although the inverse correlation is not as strong with equities, it still exists. But the USD’s resilience during the second half of this year hasn’t stopped stocks from screaming higher. 

While we definitely aren’t in an environment where USD weakness is a tailwind, the evidence continues to stack up in favor of the bulls and risk assets. 

The dollar is just one data point. But it’s a rather important one, as the direction of King Dollar has proven to have a profound impact on other asset classes.

Today, we’re going to highlight the decoupling of USD relationships and what it could mean for the rally in risk assets.

Let’s...

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

Then we flip...

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 bottom-up scan, “Under The Hood.”

We recently decided to expand our universe to include some mid-caps…

For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but we think it’s time we branch out a bit and allow some new stocks to find their way onto our list.

The way we’re doing this is simple…

To make the cut for our new Minor Leaguers list, a company must have a market cap between $1 and $4B. And it...

Uptrends are a pattern in the market that every investor should be able to recognize.

When prices are making higher highs and higher lows, and the line goes from the lower left to the upper right, we call those uptrends.

Learn it. Know it. Live it.

In Bull Markets, you get a majority of stocks doing just that - going higher.

In Bear Markets, most stocks are NOT doing that.

In February, things really changed. After that, most stocks stopped going up.

But that's now reversed. The bull market is back baby!

Look at that expansion in new highs:

Most people are not comfortable saying, "I don't know".

That's the arb

This is where there's opportunity.

And it's funny when you think about how silly that is.

I mean, of course we don't know!

How could anyone possible know what's going to happen in the future? Stocks or otherwise.

The weekend is a great time to take a step back and think about things.

Thinking is underrated.

I'm also bullish on breathing.

If I could buy a leveraged ETF on breathing I would.

Writing helps me do both of these things.

So today I'm just going to point out a few things that are on my mind, and maybe they'll help you understand how I approach the world.

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

Our Hall of Famers list is composed of the 100 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that which you can check out here.

The Hall of Famers is simple.

We take our list of 100 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s take a look at some of them now.

Here’s this week’s list:

And here’s how we arrived at it:

• Filter out any stocks that are below their May 10th high, which is when new 52-week highs peaked for the S&...