A big concern for stocks this summer was that there weren't any bears left.

Most of the silly permabears had given up and moved on to torture investors in other asset classes like Bitcoin or Gold.

Sentiment this summer was a headwind.

And now it's the opposite. Sentiment is a tailwind for stocks.

Take a look at the sentiment from Financial Advisors and Individual investors. Just a few months back, we saw the most amount of bulls since January 2018, just before stocks all over the world plummeted.

All it took was half the nasdaq stocks dropping 20% for sentiment to mean revert. Take a look at this chart showing that we're down to levels where bulls historically start showing up, and that's usually because of an increase in stock prices:

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.

Cyclicals Shine

In recent week’s we’ve witnessed a slew of former leadership groups -- mostly growth sectors, achieve our targets and begin to roll over. This might have been a more concerning development if we weren’t witnessing value and cyclical stocks pick up their slack so aggressively. Over the past couple of weeks, we’ve seen energy stocks rebound and make a swift move off support as well as financials rally back to fresh all-time highs. More recently, we’re now seeing industrials and materials dig in and rally off their year-to-date lows. Once again, the bears had some charts looking vulnerable, and failed to make their move. Now it appears that bulls are back in the driver seat and value stocks are poised to take on some leadership. This theme is illustrated well by the strength in our equal-weight custom cyclical index, below.

...

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 their direction and make them a pretty penny...

From the desk of Willie Delwiche.

Key Takeaway: Energy and Financials looking for friends. Bonds remain under pressure, with German yields rising toward the highest level since 2019. Breadth is no longer a relative laggard.

• Energy and Financials switched spots this week but remain at the top of the relative strength rankings, with leadership evident across time frames and market cap levels. Over the past three months, no other sector is up more than 1%. The Financials sector is up 6% and Energy is up 8%.
• Our industry group heat map shows notable strength in Energy and Banks. Health Care, Technology and Telecom groups are coming under pressure.

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.

• This week, we saw our macro universe lean positive as 62% of our list closed higher with a median return of 0.51%.
• Lumber $LB was the big winner, closing out the week with a gain of more than 15% and registering a fresh 13-week high.
• The biggest loser this week was the Volatility Index $VIX, with a loss of -11.25%.
• This week, we saw no change in the percentage of assets on our list within 5% of their 52-week highs (currently at 47...

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 bottom-up scan, “Under The Hood.”

We recently decided to expand our universe to include some mid-caps…

For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but we think it’s time we branch out a bit and allow some new stocks to find their way onto our list.

The way we’re doing this is simple…

To make the cut for our new 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...

Shame on me for using the word "Hope" in the headline for this post, but I cannot resist a good pun ;)

We've got a play here in an old school Aerospace & Defense company that is on the verge of making new all-time highs. And it just so happens it's approaching the magical $100 a share price point that often tends to act as a price magnet. We call this the hundred-dolla-roll!

Scouring our charts this morning, we couldn't help see that a lot of coins are getting tight out there.

With this volatility contraction, a big move could be on the cards, in either direction...

Big names like Cardano and Avalanche are wedged in contracting consolidation patterns. The resolution from these will likely set the stage for the coming weeks ahead.

And when we look to Bitcoin, prices have been in a very tight range, and this morning seems to be breaking higher.

Compressions like these tend to proceed quick and violent moves, just like the volatility contraction that we were writing about at the end of July before Bitcoin's monster rally off its lows.

Given that the primary trends are higher across every major crypto asset, the higher likelihood scenario is that we do see upward resolutions in the coming days.

Looking at Bitcoin, if prices are above their September highs of 53,000, we need to remain aggressively long with a...

This week we’re looking at a long setup in the Auto sector. We're seeing strength come through in the Auto segment and thought of taking a look at a stock that's ripe for a bullish move.

Let's take a look at this stock.

We retired our "Five Bull Market Barometers" in mid-July last year 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.

One of the first things you learn in Technical Analysis is that markets are fractal.

That means that you'll find the same human behaviors (i.e. price patterns) whether you're looking at daily timeframes, weekly time frames or even intraday (e.g. 10-min or 30-min candles).

This is a concept that Brian Shannon has done an amazing job of highlighting throughout his career. Brian has been an inspiration to me since about 2005, which is pretty unbelievable to think about. Since then we've become friends and go skiing together and all that. It's pretty cool how life works sometimes.

Anyway, the idea behind "Multiple Timeframes", which is literally part of the title of Brian's book (go buy it), is to use this reality of "markets being fractal" to our advantage.

That can mean a lot of different things to different people.

For us, in what we do here at All Star Charts is, we start with Weekly and Monthly time horizons. That's where it all begins.

We've been discussing Covid for so long now, that it feels as though it's been going on forever. It carried out massive damage across different segments. But we are now seeing a resumption in trends that have been in place long enough to call them trends.

As we know, travel had been largely affected by the pandemic. Getting out of the house to buy groceries became the new travel plan! But not anymore!

We're now witnessing a strong and consistent pick-up in flight and hotel bookings which means that we can start taking a look at the shares that belong to these categories as well!

So let's do just that.

First up, let's take a look at the custom Leisure Index that we track at ASC.

As can be seen from the chart below, the custom Leisure Index is at a crucial level. Currently trading close to its 2019 highs, the index seems ready to break out soon. And why is it that we think so?

Because there are signals that are coming through from the constituents of the index that suggest so.

Click on the image to zoom in.

...

Presenting to you, dear readers, the Never Say Never series. Here we will discuss all those topics that a typical market participant thinks could never happen. I am a strong believer in faith and everything but I also know to never challenge the universe - in our case: the market.

I learned early on, that biases are a natural by-product of the human mind. Everyone has them, in some form or the other. But one ought to leave these biases right outside the door before entering the market. Because as soon as you believe that something could never happen, most often it does.

I had a client ask me incessantly what the next major support of a particular stock was, and after ten revisions, I said 0. "Your maximum risk is if the stock goes to 0". He stared at me, his mouth agape with incredulity.

Cut to today, where I cannot make that statement again. You see, Crude Oil traded below 0. And that changed the very idea most people believed in, me included.

So here we are today to discuss with you things in the market that may leave you astounded.

Today we are going to discuss something that...

One thing unique about the market is that the game is never over. There aren't four 15-min quarters or two 20-min halves like in sports.

In those endeavors there is a beginning and an end.

You know who won (or who tied in some cases). But the match is over, and there will be another one in a few days or a few months, depending on the sport.

In the market, it never ends. This can cause issues psychologically, so it's something we should all be aware of and keep in mind.

But if you ask me, currently the bulls are scoring a lot more points. This is the first time we've seen that since Q1 this year, when the bears started running up the score.

Look at the S&P500 break out to new all-time highs relative to US Treasury Bonds.

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.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

We're back with another podcast episode of The Compound & Friends with Josh Brown and Michael Batnick of Ritholtz Wealth Management. This time we were also joined by Tyrone Ross, CEO of Onramp.

While the main focus may have been crypto markets, we also discussed rising rates, bank stocks, energy and gold.

This was a lot of fun, as usual with this crew!

Hope you enjoy.

From the desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 100 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’s got all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we’re developing a separate universe for that, and we’ll be sharing it with you soon.

So, The Hall of Famers is easy.

We simply take our list of 100 names and then apply our technical filters in a way that 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:

And here’s how we arrived at it:

• We filtered out any stocks that were below their May 10 highs, which is when new 52-week highs peaked for the S&P 500
...

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

Commodities have been on an absolute tear, with our Equal-Weight Commodity Index up almost 40% over the trailing year. 

But ever since Q2, the vast majority of the space has been chopping sideways along with most cyclical assets. 

Sounds a lot like stocks, doesn’t it? And while we’re still yet to see any major resolutions from equities, we have seen some bullish developments in the commodities market of late.

Energy asserted itself as the new leadership group with a series of major breakouts. Both crude and heating oil broke to new six-year highs, while gasoline futures completed a seven-year base. 

Then there’s natural gas, which gained more than 25% during the trailing month and tested its 2014 highs just above 6.

The emerging leadership from energy comes as no surprise, as we noticed signs of relative strength last month.  

Now that it’s here, what are the implications for the rest of the commodity space and global risk assets?

Let’s take a look at a couple of charts to see what...

This is the video recording of October 8th 2021 Weekly Jam Session with Sean McLaughlin.

From the desk of Willie Delwiche.

We like to say that dollars flow to where they are treated best. If that is the case, commodities could soon see a surge of inflows. The DBC/AGG ratio shows commodities surging to new multi-year highs versus bonds and the DBC/SPY ratio shows strength versus stocks as well. DBC has more than doubled up SPY on a YTD return basis (43% vs 18%). Commodities are proving again to be a place of relative safety when inflation and bond yields are on the rise. For many investors, commodity exposure isn’t even included as part of the asset allocation discussion. At least, not yet.

This is the video recording of our October 8, 2021, All Star Charts Crypto Weekly Strategy Session.