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

Crude Oil has been the Lone Ranger within the energy complex since early June, relentlessly pushing to new highs while other energy-related commodities have been stuck below overhead supply.

But that’s all changing this week as Heating Oil and Gasoline just broke above key resistance levels to new multi-year highs.

The recent strength from Energy also comes as Base Metals continue to cool off and correct. Copper, Tin, and Aluminum are all rangebound below logical levels of resistance after explosive moves off their 2020 lows. This is yet further evidence of the bifurcated market environment we're in right now. All we can do is focus on finding opportunities in areas that are trending... So, let's talk more about Energy.

What started out as a questionable...

From the desk of Willie Delwiche.

The weight of the evidence is neutral and we’ve been discussing how it has been and remains a messy environment for stocks. We can see this in our Risk On/Risk Off Ratio which has been consolidating for several months. What caught our attention recently is how closely this ratio has moved with Emerging Markets. When looking for evidence of whether the market is poised to break out (which some indexes suggest it is), break down (which some breadth divergences suggest is a possibility), or continue to move frustratingly sideways (which seems to be a minority view at this point), we would start with this chart. If the Risk On/Risk Off Ratio and Emerging Markets are making new highs, the cyclical is probably ready to resume. If they are moving lower, a deeper correction for stocks could be in store. While they continue to move sideways, it probably remains a “less is more” kind of market.

Every so often I like to put on some delta neutral credit spreads to balance out the portfolio a bit. It's all about diversifying the books so that I'm not solely reliant on direction or volatility. We've got positions on currently that will benefit from big moves in either direction, but what if the market just grinds sideways for a bit?

This is where some delta neutral credit spreads can help out.

And my preference is to initiate these trades in liquid ETFs that are exhibiting relatively high implied volatilities.

This week I popped into Yahoo Finance to chat with their Technical Analyst Jared Bilkre.

We discussed the potential bottom in Bitcoin earlier this week. If Bitcoin is above 30,000 then a long position makes sense. But if it doesn't, I think there's probably good support at zero. Who knows how low it can go from there. But I won't be in it, so it's not my problem.

With the Nasdaq100 Equally-weighted Index flirting with a breakout near 110 and the ARKK ETF near 130, these are the critical levels we're watching.

The Dow Jones Industrial Average, Dow Jones Transportation Average, Russell2000 Small-caps and Russell Micro-cap Indexes are all below overhead supply.

Messy for longer has been the pain trade and I think European Banks could be a big tell for the next direction of markets. We're watching that $20 level on $EUFN.

Click here to watch the video in full:

This is the video recording of our June 25th 2021 All Star Charts Crypto Weekly Strategy Session.

Where did all the bears go?

Have you noticed?

There aren't any left...

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

Earlier in the week, we held our June Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting 5 of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

This is the video recording of the June 24th Town Hall Meeting w/ Willie Delwiche & JC Parets

06/24/21 2PM ET

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

There’s no question the landscape in the currency market has dramatically changed with the US Dollar reasserting its dominance in recent weeks.

You can read more about this in our weekly currency post, but here’s an excerpt with the long and short of it:

King dollar is definitely back in the driver’s seat from a tactical viewpoint as we’ve seen a significant shift in favor of USD over the near term. But even the intermediate and long-term trends for most major FX pairs have flipped in the direction of the Dollar over the past month or so.

Considering this broad-based strength, it’s clear that bulls are back in control of the Dollar… at least from a near-term perspective.

So, earlier in the week we analyzed the US Dollar Index $DXY and outlined some critical levels to watch over the short run.

Now, we’re going to take it a step further and highlight a handful of tactical trade ideas in USD crosses as vehicles to express our bullish thesis. 

Let’...

There's nothing more gratifying than watching our youngsters graduate to the next level, cheering on athletes who advance through the ranks, or enjoying the ride of our investments moving from "small cap" to "large cap" during our hold.

The 2 to 200 Club report that the All Star Charts team produces attempts to give us the heads up on the next companies that are likely to make the step up to the next level. You can read our latest report here.

One of the names that caught my attention is one involved in data analytics utilizing Artificial Intelligence to drive performance.

Following Bitcoin's bounce back these last few days after some sustained selling, there's plenty of failed breakdowns out there in the Crypto space right now.

Frequent readers of ours know just how much we love these setups:

In essence, when price undercuts its former lows, stop losses get hit, and longs throw in the towel. At the same time, bears heavily jump in and enter short.

Then as the market begins to rally back above those former lows, shorts are now underwater, and they're forced to cover. While they're buying back their positions to unwind the trade, longs see price on a tear higher and fold into buying back their old position. Momentum traders see these gains and jump on the bandwagon too, forcing even more shorts to cover.

Long story short, it creates a positive feedback loop that can propel price significantly higher.

It's why we love this pattern so much around here.

Looking through our Chartbooks today, we...

For me the Small-caps really tell the story.

Curious what the past 4+ months have been like being long equities?

It looks a lot like this:

We held our June Monthly Conference Call on 22nd which our Premium Members can access and rewatch here.

In this post, we'll share five of the most important charts along with JC's commentary of them and a brief explanation for each.

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally is using various 'bottoms-up' tools and scans to complement our top-down approach.

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 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, and Salesforce, to a myriad of others… all would have been on this list at some point during their journey to becoming the market...

From the desk of Willie Delwiche.

Key Takeaways:

• Investors are optimistic, but momentum isn’t confirming price strength
• While indexes rally, breadth trends are stumbling
• Big rebound in earnings is already priced in

The NASDAQ Composite rallied to a new all-time high this week. The S&P 500 fell just shy of a record close of its own. While sentiment indicators suggest that investors are celebrating these new highs, a closer look shows that index-level price strength is not being confirmed by momentum. In fact just the opposite is happening, with weekly momentum trends continuing to move lower.

The Value Line Geometric Index has moved from new high to below its 10-week average in the space of a week. Momentum has peaked and is moving lower.

In every major asset class, there are typically a handful of indices to help drive our decisions from the top-down.

Whether we're looking at the US Dollar Index, the CRB, the Nasdaq, or any other variety of ETFs, these help form the basis for identifying leaders, laggards, and assessing the overall market.

The same applies to Crypto.

The only problem is, there's a painful lack of diversified indices to look at in the first place; S&P Dow Jones indices launched a Mega-Cap Crypto index in May, which only tracks Ethereum and Bitcoin, and MSCI is currently eyeing launching indexes of their own.

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

This is the video recording of the June 2021 Conference Call.