During our team's weekly strategy meeting this morning, we were chatting about how the retail sector has just been hanging in there. And don't we know it -- we've had a long puts play in $XRT (the retailers ETF) since late July that hasn't gone anywhere for us. Our thinking was this sector would be the one to lead us down if the markets wanted to trade down.

Instead, it's been hanging tough and JC remarked that it might act as "a big trampoline" for some of the notable names in the space if we start moving higher.

And of course, the 800-pound gorilla in the space is Amazon $AMZN, so if we're going to play a move higher in retailers, it makes sense to start here.

There's a permeating myth that cryptos are too volatile to invest and trade.

Naysayers will argue that because volatility's so high, they won't touch it.

The reality is that Bitcoin's less volatile than some members of the S&P 500.

Hell, Crude Oil literally traded in the negatives just over a year ago... talk about recency bias for people leaving that out from the equation.

The real debate isn't comparing cryptocurrencies to other asset classes, it's one of risk management.

So let's flip the question.

It's that time of the month, guys!

We get to see monthly candlesticks and refocus on the broader trend. We've said time and again how messy the current market is. When we look at the daily chart, we see a mess. When we look at a weekly chart, we see a mess. But when we look at monthly charts, a lot of things become clear.

It's almost as if you're trying to take a picture but the lens is unable to focus on the object. Monthly candlesticks correct just that. They help us focus on the object and present a clear picture of the trend.

We took a peek at some of the charts, and at a broader level, we thought these help understand some trends clearly.

From the desk of Willie Delwiche.

Key Takeaways:

• Median stock has gone nowhere for months
• Bond market trusting Powell more than data
• Commodity strength fueled by broad participation

As discussed in yesterday’s Market Notes, last week’s rally has us questioning whether we remain in the choppy market that has been experienced on many levels for the past few months or if we are poised for some degree of resolution to the upside. Today, we’ll take a closer look at what that could mean across stocks, bonds and commodities. As market depth evaporates ahead of the Labor Day weekend, there is no reason to believe that what we talk about has to happen this week.

The S&P 500 is getting plenty of press these days for the number of new highs it has made in 2021 (over 50 at this point). I’m more focused, however, on what the Value Line Geometric Index is doing. This index has gone nowhere over the past three months (while the S&P 500 has risen nearly 8%). A new high by this index (and a return to leadership on a YTD...

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

Two months ago, we laid out plans to position ourselves for a push higher in the USD.

Of the four trade setups we identified--EUR/USD, GBP/USD, AUD/USD, and NZD/USD--the Aussie was the only one that worked. 

The fact that many of those trades failed or, more specifically, were never even triggered at all, is information!

Fast forward to today and we're looking at a failed breakout in the US Dollar Index that's been confirmed by strong downside follow-through since last week. Now, it’s time to flip the book long on some of these trades to express our thesis of further USD weakness, at least over the near term.

One trade setup that stands out due to its asymmetric risk-reward profile at current levels is the NZD/USD.

Let’s take a look at the Kiwi...

Here’s the daily chart of the NZD/USD cross:

...

The talk of the town is Solana, for good reason.

While many cryptos have consolidated in the last few weeks, the entire Solana ecosystem has been on fire!

Just take a look at this thing...

We debuted a new scan recently which goes by the name- All Star Momentum.

All Star Momentum is a brand new scan that pinpoints the very best stocks in the market. This time around, we have incorporated our stock universe of Nifty 500 as the base. Among the 500 stocks that we follow, this scan will pump out names that are most likely to generate great returns.

While we go through our lists of sectors and stocks on a weekly basis, we thought of launching a product that would highlight the names that are the strongest performers in our universe and those that are primed for an explosive move.

Just like The Outperformers scan, this is a list of stocks belonging to the sectors that display relative strength in the market at any given point in time. Since sector rotation is the lifeblood of a bull market, we will be ahead of the curve before the gears keep shifting.

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 and make them a pretty penny...

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."

To make the cut for our Minor Leagues list, a company 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.

The goal is to catch the strongest names while they're small and still have serious upside potential. If any of these stocks ever climbs the ranks to the big leagues, the returns could be huge. We're looking at 5-10x moves just to break into large-cap land!

Let's dive into this week's report and see what's happening in some of the hottest stocks in the Minor Leagues.

While the primary uptrend remains intact, small-caps haven't made any progress...

Key Takeaway: Recent laggards bounce into lead. Economic reports add noise to an otherwise quiet week. New highs for Value Line Geometric Index and Commodities would help confirm cyclical strength.

• The Financials sector bounced back in the rankings last week, climbing three spots and moving into the second spot overall. Strength within the sector is broadly based as it is at the top of the rankings from an equal-weight perspective.
• Thanks to FB and GOOGL, the Communication Services sector is in the top spot on a cap-weight basis. On an equal-weight basis it ranks below everything except Consumer Staples.
• At the large-cap level, Transports are near the bottom of our industry group rankings. Mid-caps however, are showing strength and small-caps are improving. 

Steve Strazza and I were chatting this morning shortly after the market opened, looking for trading opportunities.

We were scanning the list of stocks we've been watching and one thing that is plain to see is the stocks that are working are really working. And if we're not in them already, there's no real sense in chasing them here.

My line to him was: "It's August 30th. S&P 500 is all-time highs. You're either already long or you're in cash. There's nothing else to do here but take a walk." He agreed.

So with this in mind, I don't have a new trade idea for us today. But I'll leave you with this...

It's sure getting tight out there...

There's an old adage that from compression comes expansion.

We saw this exact development take place a month ago before Bitcoin's face ripper of a rally.

Here's why this "compression" is important to pay attention to:

As markets become more coiled, buyers or sellers are ultimately forced to front up. This period of shrinking volatility is often met with violent unwinds – in either direction.

So when we see these periods of notable reductions in volatility, pay attention because the resolution often sets the tone for weeks and months to come.

Fast forward to today, we're seeing the same setup take place.

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.

One of the most common characteristics of choppy markets are whipsaws. The chart below is a great example of this kind of price action, and we’re seeing it all over the place of late. Many risk assets recently violated key levels of support, but ultimately repaired the damage and reclaimed them. This type of action continues to reiterate that while the market is bending, it’s not breaking. The list of new lows in our internal breadth metrics remains muted, and critical indices and commodities, such as Energy, continue to hold their heads above important levels.

There’s an old adage that “from failed moves come fast moves in the opposite direction." Is this what could spark the next leg higher for the market? Time will certainly tell, but it’s leaning in that direction, at least in the near term.

...

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the action from 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 context of the big picture 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.

• Our Macro universe performance was positive across the board this week, as 81% of our list closed higher with a median return of 1.57%.
• The biggest winner of the week was Oil $CL, which gained 10.30%.
• Meanwhile, the week's worst performer was the Volatility Index $VIX, which fell by -11.69%.
• Several US Large-Cap indices finished the week at all-time highs.
• Oil $CL posted a bullish reversal week.
• Only about half...

This is one I get asked about all the time.

"JC, are there any books you recommend for someone trying to learn more about Technical Analysis?"

The answer is yes. Of course.

The thing is, back in the day when I was studying for my CMT exams, there wasn't a well-defined curriculum like there is today. This was back in 2006. They would just give us a list of books to read and wish us the best of luck!

I really enjoyed that, actually. To this day I still tell people to go through the curriculum like they ask you to, but then go back and read the books too!

Now, if I had to do it all over again today, this is what I would do:

This week we’re looking at a long setup in the IT Sector. IT is trading at all-time highs, and displaying the strength you'd like to see at an index as well as a stock level.

Let's take a look at the trade idea this time around.

When Consumer Staples are underperforming, what type of environment are normally in?

Staples are making new multi-decade lows relative to the S&P500 and flirting with a catastrophic breakdown relative to Consumer Discretionary stocks:

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.

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 and Ian Culley @Ianculley

Pockets of strength continue to emerge within commodities.

This could be hard for some to believe when we see things like energy chopping beneath overhead supply.

Or the fact that precious metals persist in slumming it as some of the worst-performing assets on the planet.

But this is a diverse asset class with plenty of bright spots that suggest strength and support our thesis of a new commodities supercycle.

We’ve recently covered breakouts in Sugar and Feeder Cattle that are both still in play.

Even some of the laggards, like Silver and Lumber, recently defended critical areas of support.

This week, it was impossible to miss the chart of Oat futures. Let’s have a look!

Here’s a weekly chart of Oats:...