From the Desk of Kimmy Sokoloff

Yesterday was a very volatile day, once again.

$SPY tested the 370 resistance level then headed downhill to 363.

ICONIQ Strategic Partners LP filed a Form 4 reporting the purchase of roughly $3.7 million in Braze Inc $BRZE.

The fund now has a total stake in BRZE of more than 28.70%.

The stock we're looking at this week is part of the Defence Industry Group. The focus is on sectors with clear direction.

We retired our "Five Bull Market Barometers" in 2020 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.

From the Desk of Kimmy Sokoloff

This morning, it looked like the market could've trended higher.

I bought $SPY at 367.4 and it rallied to 370, a resistance level.

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

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...

From the Desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

This year, we expanded our universe to include some mid-caps.

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

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to focus on the best players.

But, instead of all-time highs, we're sorting by 52-week highs these days, as we don't want to discriminate against energy or other cyclical stocks.

...

The S&P 500 is testing its mid-June low as it remains in a persistent down-trend. Investors and traders can lean against specific support levels, but it is hard to have high levels of conviction when price and breadth trends continue to decline. 

The Details: At 24 weeks, the current down-trend has lasted longer than any since the Financial Crisis ended in 2009. Prior to the feast or famine years of the past quarter century, persistent downtrends were normal market behavior. 

More Context: Even painful and persistent downtrends eventually end. But for stocks that is much harder to do when bond yields are trending higher (which they are) and/or the dollar is trending higher (which it is). If the stock market trend is going to turn higher, it needs a helping hand from either the bond or currency markets.

Our Deeper Look moves beyond the index and looks at how the market got here and how it is holding up versus where it was in June....

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.

Macro Universe:

• Our macro universe was negative this week as 91% of our list closed lower with a median return of -4.00%.
• The Volatility Index $VIX was the winner again, closing with a 13.76% gain.
• Meanwhile, the biggest loser was Lumber $LB, with a weekly loss of -9.60%.
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 6%.
• Only 9% of our macro list made fresh 4-week...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts 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.

A Quarter Century of Sideways

We like to use the Value Line Geometric Index as a representation of how the average, or median stock is making out. While the S&P might be a better illustration of the performance of an average portfolio, the Value Line shows us the performance of the average stock.

With prices cratering back beneath key prior-cycle highs, it’s not painting a very bullish picture for the broader market. These dot-com bubble and financial crisis highs ~510 are as important as any level in the stock market right now. If we’re below there, downside risks are elevated, and we’re on the sidelines. The fact that the median stock price has made zero progress since its 1998 peak almost 25-years ago tells you all you need to know about the damage the overall market has already endured. As long as VLG is below these former highs, we want to be prepared for more to come.

...

Premiums remain elevated in the options market as volatility persists and confusion among market participants reigns supreme.

We sold a delta neutral spread on Friday to take advantage of this environment. Today's trade will also be a credit spread, however, this time we will be taking on some bearish directional exposure to counterbalance some of our long exposure.

Last week, we worded our letter in a rather dramatic fashion, arguing that Bitcoin was on the edge of the abyss.

Since then, we've seen equity markets make a decisive move to the lows, while currency markets have acted in spectacular fashion. The US dollar continues to strengthen, while the UK pound sterling printed at new all-time lows.

As far as risk markets are concerned, this is a rather treacherous tape, and caution is still advised over more substantial time frames.

Much of our job as technical analysts is to discover pieces that don't conform to the regular puzzle.

What's caught us by surprise is the resiliency of crypto markets in the face of this risk-off action. Bitcoin continues to defend its critical 18,000 support level even in the face of equity markets selling off.

Furthermore, our breadth metrics suggest that altcoins have been holding up better than individual equities.

Let's dive into this week's letter.

We've adjusted a position in the Paid-to-Play portfolio today:

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Monday October 3rd @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday evening:

The market is extremely volatile, and there's a decent chance the S&P 500 will touch the June lows of 3,636. That's 362.17 on the $SPY.

The market is very oversold. But that doesn't mean we cant become even more oversold before we bounce.

The largest insider transaction on today's list is a Form 4 filing by Daniel Durn, the CFO of Adobe $ADBE.

Durn reported a purchase worth roughly $936,357. He was appointed CFO this time last year.

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.

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.

From the Desk of Ian Culley @IanCulley

It’s not all doom and gloom out there… 

I know the market’s ugly right now. Risk assets are getting crushed across the board. 

But, believe it or not, greener pastures do exist in this market.

And, on days like these, I choose to focus on areas that aren’t free-falling into the fiery depths of hell.

Last week, I discussed the relative strength of the less economically sensitive grain complex. These contracts are more defensive in nature and are currently escaping the broad selling pressure.

That’s a relief!

When it comes to today’s trade ideas, I’m sticking to the individual contracts with the highest volume heading into the fall. Those are the charts and levels of the most importance.

Do the levels on the continuation charts come into consideration?

Absolutely!

Premium members can reference our Commodity Chartbook below for our structural outlook and reach out at info@allstarcharts.com with further questions.

All right! Let...

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

Our Hall of Famers list is composed of the 150 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; click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

Click table to enlarge view

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month. 

Then...

From the Desk of Kimmy Sokoloff

What a day, what a wrecking ball.

Let's say goodbye to September!!