The last time we discussed altcoins, we mentioned we were tactically shorting overbought names bouncing into supply while eyeing more intermediate-term long positions.

This approach paid off, with names like Gala $GALA and Sandbox $SAND succumbing to the selling pressure, booking a quick profit.

Moving forward, as we laid out in yesterday's note, the market's in a state of balance, and we have a neutral outlook.

This is the time when we're closely monitoring names showing leadership, waiting patiently for setups to solidify.

This will be a short and sweet note with three long trade ideas.

Today we're taking a pick from the Commodity sector. There's been a slight pick-up in activity along with a big base breakout. Which stock is it?

Let's take a look at the trade for this week!

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.

In last Monday's note, we discussed a variety of data points suggesting Bitcoin was in the beginning phases of carving out a tradable bottom.

We also mentioned that we anticipate a few weeks of sideways price action ahead of further upward price discovery. Since then, we've seen a handful of developments paint a more neutral picture.

Unlike spot prices, futures never flipped to buying and are still in a fairly strong regime of selling via calendar futures.

There's also been a gentle deleveraging of open interest and an increase in defensive positioning, as investors have been withdrawing capital off the back of geopolitical volatility.

Meanwhile, legacy markets continue to act as a headwind. Bitcoin and equity trading correlations remain high, and it's yet to be seen whether Bitcoin can front-run equity weakness, like what took place in October last year.

This all takes place as Bitcoin remains above our risk level of 41,000.

One of the limitations of evaluating spot flows since November is that despite...

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...

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.

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

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.

The way we did 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.

The same price and...

From the desk of Willie Delwiche.

Key Takeaways:

• US equities churn as new lows out pace new highs.
• Bond market is taking notice that the flat-footed Fed is trying to get ahead of inflation.
• 60/40 portfolio off to its worst start in a generation could have “passive” investors looking for greener pastures.

In the wake of the January sell-off, US stocks have been trying to get back in gear. So far that has been easier said than done. The initial rally attempt on the S&P 500 stopped short of the 50-day average and our sector trend indicator was unable to get back into positive territory. One telling sign that a churning/trading range environment remains intact is the new lows continue to outnumber new highs across the NYSE and NASDAQ. Since 2000 all of the net gains in...

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 Value Among Small Caps

We've been pounding the table on the importance of the 2021 lows for small caps. After consolidating for almost a year, sellers took control and knocked prices beneath this critical support zone last month. Until this level is reclaimed, risk is to the downside and we don’t want to own the Russell 2000. However, we can own small cap value stocks as they continue to show impressive relative strength. This is illustrated by the Russell 2000 Value ETF (IWN) holding above its former lows -- unlike its peer indexes in the lower panes. This speaks to risk-seeking behavior and is another example of the cyclical leadership theme that is playing out across various markets. And just like we don’t want to be long the indexes that are beneath their 2021 lows, when it comes to individual stocks, we want to focus on those that are resolving their ranges higher for long opportunities....

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 slightly red as 57% of our list closed lower with a median return of -0.29%.
• The Volatility Index $VIX was the winner, closing with a 17.83% gain.
• The biggest loser was Nasdaq 100 $QQQ, with a weekly loss of -3.06%.
• There was a 7% drop in the percentage of assets on our list within 5% of their 52-week highs – currently at 21%.
• 13% of our macro list made fresh 4-week highs, 9% made...

As the market continues to test the resolve of both bulls and bears, some bearish setups are starting to trigger.

The team put out their latest Short Report last week and one of the names from that list triggered an entry this morning. And considering that my portfolio of options positions is currently leaning long, I like the idea of establishing some bearish positions to add counterbalance to my holdings.

So let's get right to it.

On this episode of Pardon The Price Action, we're talking about which stocks have been, and are, benefiting the most from higher interest rates.

Insurance stocks are ripping, International equities are outperforming and it's not just Energy commodities that are doing well. We're also seeing the strength in Base Metals and Agriculture.

With many Growth stocks still under pressure, which are some of the best areas to sell short?

All this and more on this week's episode of Pardon The Price Action.

Check out the full video:

What's amazing to me is how many investors have owned the wrong FANG this whole time.

Instead of owning Diamondback Energy, ticker symbol: $FANG, they owned a bunch of growth stocks.

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 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 which you can check out here.

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:

And here’s how we arrived at it:

• We filtered out any stocks that are below their May 10th 2021 high, which is when...

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

It’s only six weeks into the new year and we’re already getting a sense that commodities could very well outperform just as they did in 2021.

Evidence supporting our commodity supercycle thesis continues to mount each day, as participation across the commodity space expands.

Crude oil is breaking above 90. Base metals like aluminum and tin are hitting new all-time highs. And the rally in grains is getting back on track.

All these things suggest that last year's bull run wasn’t a simple “one and done” event.

One key difference between last year and today is strength among commodities is starting to spill over into commodity-related equities.

This is a critical development that supports our bullish thesis. 

Today, we’re going to run through some stocks, highlighting the renewed strength from some of these...

In a market that's going sideways, it can become quite frustrating to figure out what the trend is. More often than not, there are certain sectors that perform well and certain sectors that don't. But it's also important to identify other avenues of investment that could generate good returns over a period of time.

Today we're exploring one such theme in the form of REITs. Read on, to learn more.

From the desk of Willie Delwiche.

There are no magic indicators that are right 100% of the time, no silver bullets, no “one Ring to rule them all.” That’s why we spend so much time talking about weighing the evidence and looking at the behavior of risk on and risk off indicators. That being said, there are times when one indicator or another seems particularly relevant. That is now the case with the number of stocks making new highs and new lows on the NYSE+NASDAQ. The spread between new highs and new lows peaked in early 2021 and was fading (though stayed positive) for much of the year. The situation deteriorated in November and new lows started to outnumber new highs. Even as the indexes moved off of their January lows, we’ve continued to see more stocks making new lows than new highs. Since 2000 all of the net gains in the major US indexes (S&P 500, NASDAQ Composite, Russell 2000, Value Line Geometric Index) have come when the cumulative net new high list has been expanding. The bottom line is that history suggests the indexes could continue to struggle so long as new lows are outnumbering new highs. 

...

While certainly not at panic levels, we've been seeing a persistent $VIX holding north of 20, and the last two days we saw it flirt with 25. This signals to me that there is still a bit of uneasiness remaining in the stock market, leftover from the recent correction.

Scanning my books, I noticed my portfolio is a little light on delta neutral premium trades, so we're going to take the recent rise in volatility as an opportunity to add a little diversification.

As always, I take a gander at my list of the most liquid ETF options and look for the ones with the highest implied volatilities right now. And then if the chart suggests some consolidation is in order, that's where I look to strike.

This is the video recording of our February 11, 2022, All Star Charts Crypto Weekly Strategy Session.

Did The Economist just call the bottom for the market?

Take a look at the latest cover.

They're asking the question, "What would happen if the markets crashed?"