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

We're a day away from the anticipated Ethereum merge, by which the network will transition from a Proof-of-Work to a Proof-of-Stake model.

Investors are clearly hedging their positions moving into this event, with Ethereum perpetual swaps trading with rather bearish funding rates.

And Ethereum quarterlies have been trading firmly in backwardation, pointing to a strong flight to hedging positions.

The most significant insider activity on today's list comes in a Form 4 filing by Kelcy Warren, the executive chairman of Energy Transfer $ET.

Warren reported a purchase worth roughly $29.2 million.

PSU Banks are generally slow to catch up on a bullish trend. But speed is not what we're after. We're trying to lock into accuracy. So we wait patiently until the alarm bells go off and then we look into PSUs.

Well, its that time again! We have some stocks here that are displaying strength and some that are just breaking out. Let's take a look at this list, shall we?

Let's start off with an index view, just to see where we're at in the trend.

Guess what we have at an index level when it comes to the PSU Banks? 2-year highs, folks! PSUs had been struggling to sustain above the crucial level of 2,700. As you can see, the price movement in the recent past has been full of whipsaws. We finally have new highs coming off of those whipsaws as well.

With the price gaining momentum, we're looking out for targets close to 3,445 and 3,730.

Click on the chart to zoom in.

Ok, so the trend is positive on an absolute basis. But do we have any update on relative strength?

We may.

Key Takeaway:

• Getting back to “Yes” on our Bull Market Re-Birth Checklist still requires some heavy lifting.
• Beneath the surface, stocks are getting back in gear.
• The Fed isn’t a friend and overcoming higher bond yields could be a challenge for stocks.

Stocks turned higher last week, and while Friday saw more new highs than news on the NYSE for the first time in two weeks, it was not enough to prevent a third consecutive week of new lows outpacing new highs (on both the NYSE and NASDAQ). Friday’s strength was sufficient to produce an encouraging up-side volume thrust and our short and intermediate-term risk indicators moved back into positive territory last week. If stocks can build on that progress, we could soon be hitting “Yes” on a number of our Bull Market Re-Birth Checklist criteria. But there is still plenty of work to be done.

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.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

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...

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...

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

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.

Finding Support with Fibonacci

US equities appear to be regaining ground after giving back some of their gains from this summer. Following the corrective action of the last few weeks, the Nasdaq 100 ETF has finally found support at the 61.8% Fibonacci retracement level of the June-to-August advance. These levels represent a logical place for demand to show up and halt prices from falling further. We’re watching closely to see what kind of follow-through we get in the coming days. If this was really the bottom, we should see a higher high in the near future. On the other hand, a break below 294 would signal increased downside risk and likely lead to a retest of the June lows. From a tactical standpoint, this is our line in the sand for the Nasdaq 100.

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:

• This week, our macro universe was positive as 74% of our list closed higher with a median return of 2.66%.
• The S&P High Beta $SPHB was the top performer this week, closing with a 6.34% gain.
• The biggest loser was the Volatility Index $VIX, with a weekly loss of -10.52%.
• There was a 3% gain in the percentage of assets on our list within 5% of their 52-week highs – currently at 9%.
• 4% of our macro list made...

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

To close the week, we saw a remarkable rally that drove Bitcoin prices up more than 10%. This was the largest single-day gain going back to February 28.

This came after Bitcoin tested the shelf of support near 19,000, while equity markets bounced on an important inflection point.

In last week's letter, we pointed out that buyers needed to step up and defend these levels, which they clearly have.

On Thursday, we mentioned the purchase made by the CEO of Asana $ASAN, Dustin Moskovitz, of $350 million  of ASAN stock through a private placement.

Moskovitz has completed the Form 4 filing.

The stock we're looking at this week is part of the Industrial Manufacturing sector. Let's examine which name has made it to our scan this time. Also, check out our latest post on Industrial Manufacturing stocks paving the way for the next leg of the rally!

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.

The Industrial sector has been on our radar throughout this year. The Nifty 500 peaked in October 2021, whereas stocks from the industrial sector continued to show resilience. Our outperformers scan list is full of industrial stocks.

Our Custom ASC Industrial Index is making a new all-time high on an absolute and a relative basis. We are looking for opportunities to add based on price breaking above the consolidating or options to add within an ongoing bullish uptrend. Finally, we'll look into potential multi-year breakouts.

In this post, we'll update the trade ideas from the last post and add a few new actionable setups that look attractive on the long side for the next few weeks and months.

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.

Have you noticed that stocks aren't getting oversold?

So not only did the new lows list go quiet, since peaking almost 3 months ago, but stocks aren't even seeing oversold readings.

The sellers appear to be exhausted.

We define oversold conditions as a 14-day RSI below 30. It's incredibly informative.

If you think a stock is in an uptrend and it's hitting oversold conditions, then it's probably time to reevaluate that thesis.

In uptrends you see overbought readings (RSI >70), and more importantly, a lack of oversold readings.

Look at the S&P500 not getting oversold at all during the Spring and Summer months:

From the Desk of Ian Culley @IanCulley

Gold has been a terrible inflation hedge over the trailing 24 months. It’s gone nowhere since the summer of 2020, while every other commodities have experienced rip-roaring rallies.

The truth is, the "inflation hedge" narrative is just that – a narrative. And I believe it’s false.

But, more importantly, so does price.

I prefer to lean on John Murphy’s observation that gold has a tendency to sniff out inflation, leading to major bull runs in commodities.

And, with gold futures on the verge of breaking down to fresh two-year lows, I think it’s a good time to revisit this often misunderstood metal.

Remember, gold was the first commodity to rally in 2019 – a full year ahead of the rest of the rest of the space.

Here’s a chart of gold futures overlaid with our equal-weight commodity index, highlighting the base breakouts:

Not only did gold experience a swift rally while most commodities were fast...

From the Desk of Steve Strazza @Sstrazza

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. You can 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, we sort the remaining...

From the desk of Willie Delwiche.

Inflation data has overtaken jobs data as the economic indicator that seems to generate the most interest every month and next week’s CPI report will be no different. But seeing inflation just from a post-COVID perspective misses the point. It’s not about prices for used cars or gasoline or shipping containers. Those might be in the headlines but they aren’t the news. The match was struck when the Fed was cutting rates in H2 2019 with wage growth and median CPI inflation at their highest levels in a decade and more job openings than unemployed workers for the first time ever. That reality got lost during the COVID shut-down & re-opening. All the stimulus that followed was fuel for the fire. The Fed made a policy error in 2019. The Fed compounded that error by mis-reading the situation and remaining complacent through 2021. All that being said, we may very well be nearing peak inflation. Inflation needs to stop going up before it can start going down. But it having stopped going up doesn’t mean that it has started going down in a meaningful way.

...