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

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 only.

The goal is to catch the strongest names while they’re small and still have serious upside potential. If any of these stocks ever climb 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...

Market tops are a process. They just don't happen overnight like the headlines would often have you believe.

You're seeing stuff like this today: "Dow futures tumble 300 points on worries over rising COVID-19 cases"

And people actually believe it. Heck, even the headline writer probably believes it.

But if you've been following along here, where we track the actual facts, stocks peaked back in February, and that was confirmed in March. 

The Nasdaq new highs list peaked on February 8th. And the Nasdaq Advance-Decline line peaked the very next day on February 9th.

That same week US Small-caps and Micro-caps decided to stop going up as well: 

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.

I've also promised you guys that I would do my best to highlight the work of some of my friends who I think do a good job of analyzing markets. 

So today I want to show you a seasonal chart from Ari Wald, Head of Technical Analysis at Oppenheimer.

The main chart represents the US Presidential Cycle peaking in the 3rd quarter of Post-Election years. That's this quarter.

Click Chart to Zoom in

On the lower right, Ari did a nice job of showing the annual seasonal cycle going back 30 years. This one peaked yesterday, July 16th. 

We've discussed the deteriorating market breadth. We've talked about the Intermarket relationships all rolling over, particularly in the bond market and currency markets. And sentiment-wise, there simply aren't any bears...

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

One of the main themes we discussed in the Q3 Playbook we published last week is the lack of any directional bias for equities on a relative basis.

We’ve been obnoxious about the trendless environment for equities on an absolute basis... and now we’re noticing a lot of the same play out in many of the relative trends we monitor.

When there is no edge on absolute terms, we can at least try and generate alpha by taking advantage of relative trends through pair trades.

But, right now there’s really nothing out there giving us an opportunity to do so. This is about as rough of an environment for money managers as you’ll find.

All we see is sideways, sloppy, range-bound action… Standard year-two stuff!

To illustrate what we mean, let's take a look at each large-cap sector SPDR relative to the S&P.

We'll start with the “growthy” sectors.

Technology relative to the S&P 500 has been a sideways mess for the past 10...

The good folks at Stockcharts.com put together a fun panel and asked each of us to bring 2 charts: Which one tells the story of the first half the best? And which chart am I watching most as we head into the second half?

I've been friends with Jay Woods for a long time and I'm now getting to know John Kosar's work, and I can tell you these are some smart dudes. You want to listen to what these guys have to say.

Enjoy!

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

Opportunities are springing up in the commodity space!

Yes, energy, base metals, and (especially) precious metals continue to consolidate below overhead supply.

But this doesn’t necessarily speak to weakness… 

In fact, much of the sideways chop in commodities is taking place at logical levels of resistance. And aside from the dramatic sell-off in lumber, we see more upside resolutions than violations of critical support levels.

We recently pointed out that base metals managed to hang tough in the face of a significant correction in copper. And this week, tin is breaking out to new all-time highs.

...

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

It's a tale of two markets. 

The weight of the evidence remains mixed across asset classes. We also continue to see more and more risk assets struggle at overhead supply. This is particularly true for equity and commodity markets.

From an intermarket perspective, most risk appetite ratios and risk-on relative trends are either moving lower or are rangebound.

Simply put, there's little in terms of directional edge for investors. The data remains split right down the middle -- and there are sound arguments for both the bull and bear case.

Although the information we're getting from the Bond Market is much more consistent these days. And what we're seeing is suggesting lower yields for longer.

Let's take a look... 

These are the registration details for our live monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Monday July 19th at 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 night:

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Several weeks back, we discussed the fact that new lows were non-existent across just about all of the major averages in the US.

It’s pretty hard for a market of stocks to decline in any meaningful way without an expansion in downside participation. And we just aren't seeing any signs of this when looking through our breadth chartbooks and new low indicators - not even on shorter timeframes. This remains the case today.

We've been pounding the table on our view that this is nothing but a messy market, as well as the fact that many significant risk assets are chopping around key resistance levels.

So you would think this would be an excellent opportunity for the bears to take control… But, they just can't seem to get it done! Let's dive into some of our breadth and sentiment indicators and see what...

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Thanks to everyone who participated in last week’s mystery chart.

We asked whether the chart could make a decisive upside resolution out of its consolidation pattern, or if this level will continue to act as resistance and keep a cap on prices.

The responses were mixed, with many wanting to wait for more information. In many cases, people were looking for confirmation of a breakout.

The chart was a daily candlestick view of the iShares Semiconductor Index ETF $SOXX.

Not much has changed since we first posted the chart. In fact, price has yet to make a decisive move from this key level. Let's dive in and see what's happening and where it's likely headed.

From the desk of Willie Delwiche.

Key takeaway: It’s bears on strike and bulls on parade. While it persists, it can fuel a rally. Whether it can persist is another question. We have already seen (particularly in less robust trading activity and a downward trend in the NAAIM exposure index) evidence of waning risk appetites. Earnings season may test investor resolve. Expectations are in the sky in terms of both results for the past year and estimates for the year ahead. If the earnings rebound is seen as slowing, investors may struggle to maintain an optimistic outlook for stocks, especially with valuations suggesting that they are priced for perfection at current levels.

Sentiment Report Chart of the Week: Earnings are expected to soar

Q2 earnings season is heating up and the results are expected to be outstanding. Not only are earnings overall expected to have risen more than 60% from year-ago levels, but they are expected to continue to...