Today we're here to discuss with you our process of Top/Down Analysis. As we go on our way, we'd like to take you along on this journey as well.

With the market sectors passing the baton of strength to one another, one sector stood out. PSU banks not only stood out in terms of the outperformance that we're witnessing but also simply because they are PSU Banks. When was the last time one was bullish PSU Banks?

Those who've had their fair share of capital loss in the past have had something to do with PSU banks. For sure.

But has the tide turned? Are we entering a bull market when it comes to this sector? Let's take a look!

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?

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

Correlations often work... until they don’t. It’s just the nature of intermarket relationships.

We can see a prime example in the recent action between the US dollar and risk assets.

The dollar has been marching to the beat of its own drum, as it's shown an unusually strong positive correlation with commodities since this summer.

Although the inverse correlation is not as strong with equities, it still exists. But the USD’s resilience during the second half of this year hasn’t stopped stocks from screaming higher. 

While we definitely aren’t in an environment where USD weakness is a tailwind, the evidence continues to stack up in favor of the bulls and risk assets. 

The dollar is just one data point. But it’s a rather important one, as the direction of King Dollar has proven to have a profound impact on other asset classes.

Today, we’re going to highlight the decoupling of USD relationships and what it could mean for the rally in risk assets.

Let’s...

From the desk of Willie Delwiche.

Key Takeaways:

• Despite macro concerns, evidence tilts toward opportunity
• Energy sector strength benefitting active asset allocators  
• Country-level leadership favors dirty energy over clean plays.

A recently published article in the Wall Street Journal reviews "5 reasons why stocks might be weaker in 2022." Mostly it's a list of macro concerns, from liquidity constraints to slowing profit growth to elevated valuations. I am sympathetic to a number of them - to a greater or lesser extent they factor into my consideration of the weight evidence. We need to balance our thinking about various things that could happen against an assessment of what is happening. As any sailor might attest, there can be a big difference between risks on the horizon and conditions that need to be navigated. You don't make much progress if you drop the sail the moment there are storm clouds in the distance. There may be a time to reckon with some (or all) of those clouds at some point, but as we have been discussing in recent...

Things are shaping out really nicely for crypto right now, and the evidence suggests it's only getting started.

Crypto bull markets are seriously no joke, and we wouldn't be surprised to see a lot of these names multi-bag over the coming months and quarters.

But despite how well things are looking, it's vital to remain humble and level-headed throughout it all.

The old saying that "don't confuse brains for a bull market" is particularly relevant here, and is the epitome of the laser eyes crowd. Any idiot can buy a coin that moons in a crypto supercycle, but not everyone can successfully manage risk and their emotions.

"I don't know" is always the right answer.

So despite how well things are shaping out, always try to stay humble and level-headed.

From the desk of Willie Delwiche.

Key Takeaway: Small-caps leading the way higher. No breadth thrusts (yet) but rally participation is improving. Looking for copper & bonds to confirm risk on messages from the equity market.

• Energy and Information Technology are at the top of the relative strength rankings. The industry group heat map confirms this strength with Energy and Semiconductor groups (up and down the cap scale) accounting for five of the top ten spots in the industry group rankings.
• Relative weakness can be found in Utilities, Consumer Staples and Health Care, trends that are echoed in both our sector rankings and the industry group heat map. 

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.

Then we flip...

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...

That's right, I'm on the couch, settled in for a nice rom-com with the wife, passing the chip dip, and thinking about the stock dip I'm about to buy.

Sometimes, this is where and when my best ideas hit me. How about you?

But in the case, it just so happens the All Star team was already one step ahead of me on today's idea as they covered it in their recent Monthly Charts Strategy Session last week. At least now I get to enter at a better price!

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.

Breadth Confirms New Highs

Last week we covered the modest breadth expansion in US indexes. The picture was still somewhat mixed as most AD lines had not made decisive breakouts. That all changed this week. Not only did most large-cap AD lines in the US make new highs, but small and mid-cap AD lines also resolved higher. Here’s a look at the advance-decline lines for both developed and emerging markets, which are pressing up against new highs as well. This is the kind of broad confirmation from internals that bulls want to see.

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, our macro universe was positive as 83% of our list closed higher with a median return of 0.87%.
• Small Caps $IWM were the big winners, closing out the week with more than a 6% gain as the index broke out of an 8-month range.

• The biggest loser was the US 10-Year Yield $TNX.
• The percentage of...

Last week, we outlined that a big move was on the horizon, and the bias for prices over the coming weeks was higher. We were documenting the tightening volatility and the accumulation taking place on-chain, suggesting that upward price discovery was the most probable outcome.

Over the weekend, we've seen this play out in some respects, with Bitcoin breaking out of its tight range, which seems like the beginning of the next leg higher.

Now that Bitcoin is back above 65,000, we want to position aggressively long in anticipation of further strength into the remainder of the year.

Uptrends are a pattern in the market that every investor should be able to recognize.

When prices are making higher highs and higher lows, and the line goes from the lower left to the upper right, we call those uptrends.

Learn it. Know it. Live it.

In Bull Markets, you get a majority of stocks doing just that - going higher.

In Bear Markets, most stocks are NOT doing that.

In February, things really changed. After that, most stocks stopped going up.

But that's now reversed. The bull market is back baby!

Look at that expansion in new highs:

Most people are not comfortable saying, "I don't know".

That's the arb

This is where there's opportunity.

And it's funny when you think about how silly that is.

I mean, of course we don't know!

How could anyone possible know what's going to happen in the future? Stocks or otherwise.

This week we’re looking at a long setup in the Realty space. With Realty showing growing strength, this was one sector we wanted to focus on.

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.

The weekend is a great time to take a step back and think about things.

Thinking is underrated.

I'm also bullish on breathing.

If I could buy a leveraged ETF on breathing I would.

Writing helps me do both of these things.

So today I'm just going to point out a few things that are on my mind, and maybe they'll help you understand how I approach the world.

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:

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 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 which you can check out here.

The Hall of Famers is simple.

We take our list of 100 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s take a look at some of them now.

Here’s this week’s list:

And here’s how we arrived at it:

• Filter out any stocks that are below their May 10th high, which is when new 52-week highs peaked for the S&...

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

The best opportunities are the ones with the most clearly defined risk characteristics and most favorable risk/rewards.  

This summer, Minneapolis Spring Wheat was offering us a trade set-up with both these qualities. Price had just resolved higher from a near decade-long base and was trading at its highest level in 8 years. We were buying the breakout.

Fast forward to today and our initial profit target has been met and we’re locking in gains.

In today’s post, we’ll take a step back, review our trade, pinpoint current levels of interest, and discuss how we’re managing the position moving forward.

First, let’s look at the weekly chart of Minneapolis Wheat futures:

Back in July, we were buying the breakout above a...