From the desk of Willie Delwiche.

Key Takeaway: Cyclical rally needs to prove its strength. New lows and expanding downside volume suggests more fissures beneath the surface. Focus on Value Line Geometric Index for evidence that downside risks are building.

• Financials sector has continued to slip in our relative strength rankings, falling to its lowest level in over a year and dropping out of the leadership group.
• Consumer Staples remain toward the bottom of the overall rankings, but have been the top-ranked sector on a short-term basis and we are seeing evidence of improving trends at the industry group level across market capitalization levels. 
• Large-cap health care is rising in the rankings, but this strength is not echoed at the mid-cap or small-cap level (or even on an equal-weight basis at the large-cap level)

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood" column, where we'll cover all the action for the week ended November 26, 2021. This report is published bi-weekly and rotated with our "Minor Leaguers" column.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

Watch this video for a "...

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.

Messy For Longer

Many of the strongest areas for global equity markets are failing to hold their breakouts, or simply reversing at logical levels of overhead supply. The Global Dow is a pretty well-rounded representation of the world stock market. As you can see in the chart, buyers couldn’t get it done for the third time this year. Sellers are back in control for now, and with prices back in their former range, there is no directional edge over the near term. Our bias is neutral, and we’re expecting further sideways action. If and when prices reclaim those year-to-date highs, we want to be long. This is simply the case for most stocks right now.

JC and I traveled to India together a couple years back to meet with Indian prop and options traders and to lead discussions at a few events. It was an amazing experience to be able to view risk through the eyes of traders that come from very different backgrounds than our own.

It should go without saying that we indulged (perhaps overindulged?) in the local cuisine. To be honest, we ate like Kings and it was wonderful. Everything we ate was fantastic and I want to go back as soon as possible. It was such a great time with great people.

So, when perusing the latest crop of new ideas cranked out by ASC team, one name with an Indian flavor caught my attention.

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 in the red as 81% of our list closed lower with a median return of -2.28%.
• The Volatility Index $VIX was a massive winner, closing out the week with more than a 59% gain.
• The biggest loser again was Oil $CL, with a massive weekly loss of -10.45%.
• There was a 13% drop in the percentage of assets on our list within 5% of their 52-week highs – currently at 49%.
• 62% of our list made...

Bitcoin has been dragged down by legacy market volatility, even as investors continue a strong regime of buying.

The crypto market isn't fully out of the woods as far as volatility is concerned, and there are risks to be mindful of in the coming days and weeks.

But the picture remains positive for Bitcoin and the overall crypto landscape through the end of the year and into 2022.

Everyone saw it.

Everyone was talking about it.

It was the day Small-caps finally broke out of their almost year-long base.

This was finally it!

But then last week we learned that it wasn't.

Here's what that failed breakout looks like.

This week we’re looking at a long setup in the Services sector. While there is weakness in the market, we're observing pockets of strength as well.

Let's take a look at what we have today!

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.

This is the new kid that everyone is talking about.

Small-caps tried to break out this month, after going nowhere since February.

But that attempt failed this week.

And now Small-caps are back in the penalty box:

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:

The market has been in a corrective mode for a little over a month. While this correction has been gaining some momentum, we took a look at the breadth internals of the market at this stage to dig a little deeper.

One important factor when the market was making new highs, was a lack of breadth expansion.

Now the important factor when the market is making lows is breadth expansion.

From the desk of Steve Strazza @Sstrazza

Our International Hall Of Famers list is composed of the largest US-listed international stocks, or ADRs. We’ve also sprinkled in some of the largest ADRs from countries that did not make the market cap cut. 

These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.

It’s got all the big names and more--but only those that are based outside the US. You can find all the largest US stocks on our original Hall Of Famers list.

The beauty of these scans is really in their simplicity.

We take the 50 largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness. Due to the recent volatility, we’re going to do that today.

Let’s dive in and take a look at some of the most important stocks from around the world.

Here’s this...

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

Earlier this month, we discussed our outlook for a post-harvest rally, highlighting corn and soybean oil contracts. 

Here’s what we had to say: 

Cotton and coffee continue to rip. Crude oil and the energy space are grinding higher. Live cattle are breaking out. Even precious metals are starting to catch a bid.

Fast forward to today, and Ags have emerged as the clear leaders over the near term. They’ve been ripping higher while the majority of the commodity space retests critical levels of former resistance and continues to consolidate.

The fact that grains, softs, and livestock are marching higher while their peers are under pressure, tells us this is an area we should focus on for long opportunities. It’s where the relative strength is right now.

When we drill into the ag space, cattle futures continue to stand out. Not only are these some of the stronger contracts in the subgroup -- they are also...

Volatility is back!

But is it here to stay? That is the question.

You can see what things looked like coming into Thanksgiving in this week's RPP Report.

But with the prices of many key assets now below critical levels, we wonder if this is just more of a messy market, or the beginning of something bigger.

Here is the S&P500 stuck below this overhead supply from earlier this month, but above former resistance from September.

You know how parents always tell you nothing good ever happens after midnight? Well in the S&P500, nothing good happens below 4500:

If we're below that then there is a probably a much bigger problem out there, and the heaviest cash positions in 18 months would be warranted.

From the desk of Steven Strazza @Sstrazza

*** Click here to read the reveal post for this Mystery Chart ***

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.

While you can try to guess the chart, the point is to make a decision…

So, let us know what it is… Buy, Sell, or Do Nothing?

This is the video recording of our November 26, 2021, All Star Charts Crypto Weekly Strategy Session.

Given the recent volatility over the last few hours, we wanted to quickly send this update ahead of the recording of our weekly conference call to detail what's taken place and to discuss our approach to lower time frames right now.

In yesterday's note, we outlined the following:

The most likely selling event would be driven by derivative volatility through a cascading of long liquidation forced selling pressure. There is certainly a possibility this could take place, with funding still pointing to bullish positioning from speculators, but it looks unlikely with the strength of spot flows supporting the market right now.

This is primarily where we've seen the selling pressure take place, with over $750M of liquidations experienced over the last 24 hours. As much as on-chain spot-buying drives long-term cycles, the derivative markets ultimately get the final say for lower time frames.

In this podcast episode I sit down with one of my favorite technicians of all-time - John Roque. This is one of those people who influenced my thinking very early on. The combination of his simplicity along with sports analogies to describe market behavior made me a huge fan of his right away. This was about 15 years ago.

Since then, you'll here me throw out John Roqueisms all the time. I learned a lot from his way of thinking.

In this conversation we talk about the stock market, Gold, Bitcoin and Tech stocks. John also shares some fun stories about those who inspired him throughout his career and some of the things he’s learned more recently.

This was a lot of fun and a real treat for me.

From the desk of Steve Strazza @sstrazza 

Welcome to our latest RPP Report, where we publish return tables for various asset classes and categories, along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

We consider this our state of the union address, as we break down and reiterate both our tactical and structural outlook on various asset classes. Our ultimate goal is to discuss the most important themes and developments that are currently playing out in markets around the world.

There's been plenty of action these past few weeks. Let's kick things off with stocks and try to make sense of what we're seeing.

Here's our US equities table:

Let's start with a triple pane chart of mid-caps, small-caps, and micro-caps.

...

For the Indian market participants, the currency section has been extremely range-bound. And it's been that way for a while now! Every time we talk about it, there's nothing new to say.

So why are we here today?

Do we have something new to say?

Maybe...

Over the last two weeks, we've seen Bitcoin fall from 69,000 to an intraday low of 55,000, acting as a serious headwind for most of the asset class.

Despite this, spot flows have remained strong throughout this volatility, and there's a growing divergence between investor buying and price action.

Selling pressure appears close to being exhausted, and given the developments we'll outline in this update, the conditions are looking increasingly ripe for upside in the coming weeks.

We have 2 new Options trades this week as our Thanksgiving Pairing. A Bull Call Spread in Unity Software $U and Bullish Risk Reversal in Cheniere Energy $LNG.

Here are the plays:

We're buying a $U February 200/250 Bull Call Spread for around a $10.00 debit.

And an $LNG June 90/130 Bullish Risk Reversal for an approximately 25 cents net credit.

Check out our short video with the thought process behind these trades: