We've been talking a lot about crypto markets lately.

In fact, we just launched a new column exclusively for this emerging asset class.

As JC mentioned this morning, we've found quite the winning formula in selfishly pursuing projects and creating content that WE like. Fortunately, it usually turns out that our readers and clients think what we do is cool and valuable too.

Just like our new Saturday Morning Chartoons, everything we're doing with crypto lately is another great example of this self-serving strategy of ours.

Along those lines, we just created a custom index for cryptocurrency that we think is pretty damn neat. It also got us thinking about something...

Everything you see us do here is an incredibly selfish endeavor.

We build the tools that WE think are helpful. We build the scans and strategies that WE find valuable.

All the money we reinvest in people and technology are to accomplish OUR goals.

That's been our mission since day 1: Keep it selfish. Do what WE think adds value to OUR process.

And as it turns out, all of you agree with most of what we do. You ALSO think those tools and strategies are valuable and/or cool.

I've had a front row seat to this beautiful phenomenon for over a decade.

So when we're having talks internally about upcoming projects, I find myself always reverting to that:

Do WE think it's cool?

Do WE think it adds value?

For me, it's not just about one indicator or one chart.

It's a weight of the evidence game.

Since March, the bet has been Messy For Longer. We've expected a choppy environment. That's what the weight-of-the-evidence and history suggested.

But now what? Are these consolidations going to resolve lower? Or Higher? Or just stay messy for even longer?

That's what makes this all so great. I don't know. And neither do you. No one does.

It's a beautiful thing.

So as I weigh the evidence to decide rollover or breakout, I come to a series of divergences that put this stock market in quite the predicament.

With S&Ps and major indexes hovering near all-time highs, we're just not seeing it from the components themselves. Here's the Russell3000, for instance, seeing fewer and fewer new highs:

So there you have it folks, here's your Crude Oil breakout.

It was bound to happen right? It kept pushing up against those former highs.

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

As May just came to a close, many spent the weekend celebrating the kick-off to the Summer season at Memorial day barbeques. We did that too. BUT... being the nerds we are, we also spent much of the weekend pouring over some fresh monthly candles now that yet another one is in the books.

In the spirit of our sacred monthly candlestick process here at Allstar Charts, in this week's column, we're going to take a step back and discuss some of the primary trends at play in Commodities Markets.

We only get this incredibly valuable information ONCE a month. That's right. Just TWELVE times a year. As such, we really cherish weeks like these. 

So, let's dive right in and talk about one of the charts that really stuck out this month: None other than the good old Thomson Reuters $CRB Index, arguably the broadest barometer for the asset class as a whole.

From the desk of Willie Delwiche.

While new highs are being seen around the world (Europe, Frontier Markets) and in the US (Broker/Dealers, Real Estate, Energy), there is still plenty of attention on former leaders who are trying to reclaim their lost glory. A great example of that is the ARK Innovation ETF (ARKK). This fund peaked at the height of speculative fever in February and has since made a series of lower highs and lower lows. It’s now dealing with rejection as its latest rally attempt petered out shy of the confluence of the 50 and 200-day moving averages. When viewed in context of overall declining NASDAQ volume, it suggests stronger hands have been selling to weaker hands and they are the ones that are going to be left paying the tab at the end of the night. 

This is the video recording of our June 4, 2021 All Star Charts Crypto Weekly Charting Session.

The team at All Star Charts has started putting out a new report called "Follow the Flow." The goal of this report is to "create a universe of stocks that experienced the most unusual options activity – either bullish or bearish… but NOT both."

The unusual activity we're witnessing in these stocks is not necessarily "smart" money, but "aggressive" or "motivated" money. This is a useful signal.

With this in mind, one of the names mentioned in the most recent report caught my eye for a shorter duration bullish options bet.

With the Dow Jones Transportation Average hitting our upside targets last month, it's become a wait and see game. 

Are consolidations resolving higher, like they were before? Or are they resolving lower?

Based on the overwhelming amount of evidence, the bet we want to make as that Transports resolve lower, and join some of the other areas that have already been under pressure for months, like Tech and Small-caps.

When going through the components of this index, there were 6 names in particular that presented the best risk vs reward opportunities on the short side.

The first one Southwest Airlines. This looks like a top to me. How I learned it was to buy the smiley faces and sell the frowny faces.

If we're below 59, we want to be short $LUV with a target near 48.50, which represents all that former resistance last year.

...

There is now more than enough evidence to say with certainty that digital currencies are here to stay.

In the last few quarters, the market has spoken. The size of some of these coins is mind-blowing.

What was once peanuts, the total market cap of the asset class achieved the $2T milestone at its peak last month.

There are literally several thousands of options or individual coins/tokens to express our opinions, and the list is growing every day.

So the number of options and ease of access is only accelerating the interest and activity in the space. We don't see this changing.

This is the video recording of our June 3, 2021 Monthly Charts Live Strategy Session

From the desk of Willie Delwiche.

This All Star Charts +Plus Monthly Playbook breaks down the investment universe into a series of largely binary decisions and tactical calls. Paired with our Weight of the Evidence Dashboard, this piece is designed to help active asset allocators follow trends, pursue opportunities, and manage risk.

This is the video recording of the June 3rd Town Hall Meeting w/ Willie Delwiche & JC Parets

06/03/21 2PM ET

This is the video recording of the June Options Conference Call with Sean McLaughlin & JC Parets.

The greatest trick the market ever pulled was convincing growth investors that they weren't in a bear market....

You can really see it in this week's AAII Poll, which shows the FEWEST amount of bears since January 2018.

One thing I've learned, is that when the bears run out, the market has a funny way of creating some:

We can highlight as many charts and Altcoins as we like to demonstrate where things could be leaning, but with most things in markets, less is often more.

In this case, it's straightforward.

If 60% of the asset class, namely Bitcoin and Ethereum, can breakout from their current consolidations, the short-term trend is likely up, and it'd be wise to put some risk back onto the table.

Alternatively, if they cannot, and these patterns resolve lower - we should anticipate messier action for longer.

Over the past few days, we've seen the market resolve higher. With the new all-time high in place, we're seeing one sector witness growing strength.

Energy has been a part of the sectors that have been showing strength for some time now. However, there are a few stocks that are now joining the bandwagon of the 'breakout express' and this seems like a good time to jump aboard!

To start off, let's take a look at the Energy index and see what we've got there. Nifty Energy has clocked a new all-time on the Monthly timeframe. Needless to say, that is a big positive! So what are the levels that we're watching? Well, from a slightly longer-term view (we're looking at monthly charts, remember?), if Energy continues to chug on higher, we're looking at a target close to 23,825.

Click on chart to enlarge view.

Now let's dive into the stocks.

First up, let's take a look at a recommendation that has come up in our analysis in the past.

Gujarat Gas has been a part of our trade ideas as recently as the...

From the desk of Willie Delwiche.

Key takeaway: Sentiment continues to shift away from optimism and toward pessimism, though as with anything it is not a straight line. Speculative activity is flaring up again this week, the trend in trading volumes and call activity suggests less risk appetite on the part of investors. Optimism unwind is happening in the context of elevated longer-term risks, with earnings growth expectations and valuations at elevated levels. A sideways summer that cools optimism and helps relieve valuation pressures could help pave the way for the resumption of a cyclical rally later this year.

Sentiment Report Chart of the Week: Diminishing Highs

As optimism fades, so does the number of new 52-week highs in the S&P 500. It takes bulls to make a bull market, and from a tactical perspective, our sentiment and breadth measures suggest the bulls have already left for summer vacation.

From the desk of Willie Delwiche.