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. This information then helps us put near-term developments into the big picture context and provides insights regarding 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.

In last Monday's note, we outlined our multiple time frame approach in the aftermath of Bitcoin's liquidity crunch at the beginning of December.

The bottom line is we're in elevated cash positions looking for a higher-conviction entry.

The most probable outcome is that we see a contraction of volatility in Bitcoin while it ranges for the remainder of 2021. If this is the case, whipsaws are likely to be highly concentrated, and there'll be no edge in trading lower time frames or maintaining highly aggressive long positions.

But, as far as the structural picture is concerned, there's little to suggest that much damage has been inflicted on the HODLers, and spot flows continue to paint a bullish picture for 2022.

In today's report, we'll outline why this recent selloff doesn't have the characteristics leading to a deeper correction similar to what took place in May.

I saw this headline from CNBC last week:

"Sell-off in risky tech stocks feels a lot like the 2000 bubble and may not be over yet"

Meanwhile, here were Tech Stocks last week:

We're looking at Tech stocks relative to the Nasdaq.

Think about it, anything denominated in the Nasdaq is going to have a hard time going up.

But Technology finally is. And on a relative basis, it's still no where near those bubble highs.

This week we’re looking at a long set up in the Industrial Manufacturing sector. Stocks in this sector are performing well and are displaying strength.

Let's take a look at what we have today!

We retired our "Five Bull Market Barometers" in mid-July last year to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

If there is anything that can get this market going it's the US Dollar.

And granted, the S&P500 did just close at a new all-time high. That did happen Friday.

But as we have documented relentlessly here, most stocks are not doing that.

The Average stock on the Nasdaq is down over 30% over the past few quarters.

Most Emerging Markets got destroyed. Chinese Internet is down 60%. Biotechs are crushed down almost 40%. The IPO Index killed. And ARKK Funds are down over 40%.

All is not well underneath the surface.

In fact, all of those sectors I mentioned peaked in February this year. That's when the Nasdaq New Highs list peaked and Nasdaq Advance-Decline lined also peaked.

Most importantly (potentially) is that was when Aussie Dollar peaked, and I don't...

The telecom sector has been in the doldrums for quite some time for multiple reasons. But we're seeing a revival in this sector and leadership has come through from the most unlikely contestant.

Read on to find out which stock we're talking about.

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 International Hall of Famers list is composed of the 50 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 50 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 when we want to. 

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 Steven Strazza @Sstrazza and Ian Culley @Ianculley

Despite taking a hit in recent weeks, commodities have remained resilient.

Buyers are working to absorb overhead supply at some key levels. We’re seeing this kind of action in commodities across the board -- from industrial and precious metals to energy and even agriculture. We’re seeing prolonged consolidations in some of the most important contracts, such as crude oil, copper, gold, and soybean oil. 

The point is simply that most commodities are correcting through either price or time. Some are digesting gains around former areas of resistance, and others have failed to sustain their breakouts. 

Regardless of where they came from, most commodities are stuck in a range right now. That’s critical information supporting our messy outlook for risk assets.

Despite the recent bout of selling pressure, the primary uptrend is intact. Even the weakest commodities (like thermal coal) are finding support. Lumber is bouncing back above its former 2018 highs and has actually been a leader...

From the desk of Willie Delwiche.

This idea came up in passing in our ASC+Plus weekly Townhall yesterday. The messy action in Copper looks a whole lot like the messy action in Berkshire Hathaway. After peaking in Q2 both have moved sideways. Copper has been more volatile than Berkshire, moving quickly to go nowhere. They are both up more than 20% for the year, but that has been true since late-April. It’s interesting that neither broke out to new highs in November and neither has (yet) broken down to new lows in December. When we get new highs or new lows from one or both of these bellwethers, we will definitely take notice. Until then it’s more sideways actions, with volatility in search of resolution. 

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 adding our technical analysis...

There is always a silver lining to slippery stock markets like the one we experienced over the last couple of weeks: Stocks that are overdue for pullbacks get them -- and sometimes hard. Meanwhile, the stocks where there is strong institutional support and/or no real bearish case to take profits reveal themselves through relative strength.

The stocks that refuse to budge during broad market selloffs are the ones bulls need to pay attention to. Because by the time the markets signal "all clear!" (do they ever?) it's usually already too late to get in. You missed it. It ran without you.

With this in mind, one of the stocks in the recent 2-to-100 Club report caught my eye.

This is the video recording of our December 10, 2021, All Star Charts Crypto Weekly Strategy Session.

I enjoy learning about things I know little about. Sacred Geometry is definitely one of those.

But once we start applying these numbers to the market in order to help us make money, now I'm interested.

Larry Pesavento is the authority on the subject as far as I'm concerned.

Ever wonder where all these numbers and equations are coming from?

I do.

Let's dive into it!

When we do our market analysis, we go through a ton of different indexes all over the world.

But specifically within the U.S. you have things like the S&P500, Russell2000, Nasdaq100 and of course the Dow Jones Industrial & Transportation Averages. These are just a few of the most popular ones.

You can go on and on with the Value Line Indexes, Wilshire 5000, NYSE Composite and the list goes on and on.

They all serve a purpose in our analysis and all represent the market in different ways, whether it be using market capitalization, broadness of measurements and even specific sector exposure.

But you know one that doesn't get the credit it deserves?

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

Last year was all about bullish breadth thrusts.

The percentage of new highs and other internal indicators spiked to historic extremes in 2020, indicating that we were in the early innings of a new bull cycle.

But 2021 has been a very different environment, characterized by corrective price action and lackluster market internals. Believe it or not, this is completely normal during year two of a bull market.

Sideways and choppy price behavior has been the theme this year. We haven’t come close to the high-water marks achieved by our breadth indicators last year, so, naturally, there are divergences. 

Indeed, these breadth divergences are to be expected. Market internals tend to peak early in a cycle. What bulls don't want to see is a meaningful downside expansion in breadth.

During the recent selling pressure, we experienced some of the highest readings in new lows since the COVID crash.

This is the video recording of the December 9th Weekly Town Hall w/ Willie Delwiche & JC Parets

12/09/21 2:00 PM ET

From the desk of Willie Delwiche.

It’s that time of year again -- a time when our inboxes are overflowing with reflections on the year that was and speculations on the year that will be. 

We used to wait until the year ended before recapping its events and previewing what lies ahead. But these annual outlooks have been showing up earlier and earlier in recent years. In fact, I think I saw my first 2022 outlook piece before the calendar flipped to December...

I read my fair share of outlook pieces and would not go so far as to say they are all useless. I prefer those that identify a few broad themes for consideration over those filled with detailed forecasts and a veneer of precision. After all, we should recognize the limits in the usefulness of even the best prediction pieces.

From the desk of Steve Strazza @Sstrazza

Cryptocurrencies are just more stocks.

In the stock market, we have software, internet, homebuilders, and gold miners. The powers at be do their best to classify all the publicly listed companies into industry groups. This allows us to break them into various baskets and analyze them at the index level.

In crypto markets, there are tokens focused on decentralized finance, the metaverse, smart contracts, and more. But unlike the stock market, the crypto asset class is still in its infancy. As such, there is no industry standard for how to group these different tokens based on what they do.

In our analysis, we'll often discuss what some of these tokens do. We use some indexes that are offered from data providers, as well as create custom indexes of our own as we see fit.

The reason we do this is for information. Aggregating tokens into groups and analyzing them as a whole allows us to glean insights about the strength or weakness of different areas of the crypto market.

One such group that's...