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.

I saw this headline from CNBC last week:

"Sell-off in risky tech stocks feels a lot like the 2000 bubble and may not be over yet"

Meanwhile, here were Tech Stocks last week:

We're looking at Tech stocks relative to the Nasdaq.

Think about it, anything denominated in the Nasdaq is going to have a hard time going up.

But Technology finally is. And on a relative basis, it's still no where near those bubble highs.

If there is anything that can get this market going it's the US Dollar.

And granted, the S&P500 did just close at a new all-time high. That did happen Friday.

But as we have documented relentlessly here, most stocks are not doing that.

The Average stock on the Nasdaq is down over 30% over the past few quarters.

Most Emerging Markets got destroyed. Chinese Internet is down 60%. Biotechs are crushed down almost 40%. The IPO Index killed. And ARKK Funds are down over 40%.

All is not well underneath the surface.

In fact, all of those sectors I mentioned peaked in February this year. That's when the Nasdaq New Highs list peaked and Nasdaq Advance-Decline lined also peaked.

Most importantly (potentially) is that was when Aussie Dollar peaked, and I don't...

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 International Hall of Famers list is composed of the 50 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 when we want to. 

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

Here’s this week’s list:

...

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

Despite taking a hit in recent weeks, commodities have remained resilient.

Buyers are working to absorb overhead supply at some key levels. We’re seeing this kind of action in commodities across the board -- from industrial and precious metals to energy and even agriculture. We’re seeing prolonged consolidations in some of the most important contracts, such as crude oil, copper, gold, and soybean oil. 

The point is simply that most commodities are correcting through either price or time. Some are digesting gains around former areas of resistance, and others have failed to sustain their breakouts. 

Regardless of where they came from, most commodities are stuck in a range right now. That’s critical information supporting our messy outlook for risk assets.

Despite the recent bout of selling pressure, the primary uptrend is intact. Even the weakest commodities (like thermal coal) are finding support. Lumber is bouncing back above its former 2018 highs and has actually been a leader...

From the desk of Steve Strazza @Sstrazza

Dividend Aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for five to nine years.

We call them the Young Aristocrats, and the idea is that these are “stocks that pay you to make money.” Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

By adding our technical analysis...

I enjoy learning about things I know little about. Sacred Geometry is definitely one of those.

But once we start applying these numbers to the market in order to help us make money, now I'm interested.

Larry Pesavento is the authority on the subject as far as I'm concerned.

Ever wonder where all these numbers and equations are coming from?

I do.

Let's dive into it!

When we do our market analysis, we go through a ton of different indexes all over the world.

But specifically within the U.S. you have things like the S&P500, Russell2000, Nasdaq100 and of course the Dow Jones Industrial & Transportation Averages. These are just a few of the most popular ones.

You can go on and on with the Value Line Indexes, Wilshire 5000, NYSE Composite and the list goes on and on.

They all serve a purpose in our analysis and all represent the market in different ways, whether it be using market capitalization, broadness of measurements and even specific sector exposure.

But you know one that doesn't get the credit it deserves?

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

Last year was all about bullish breadth thrusts.

The percentage of new highs and other internal indicators spiked to historic extremes in 2020, indicating that we were in the early innings of a new bull cycle.

But 2021 has been a very different environment, characterized by corrective price action and lackluster market internals. Believe it or not, this is completely normal during year two of a bull market.

Sideways and choppy price behavior has been the theme this year. We haven’t come close to the high-water marks achieved by our breadth indicators last year, so, naturally, there are divergences. 

Indeed, these breadth divergences are to be expected. Market internals tend to peak early in a cycle. What bulls don't want to see is a meaningful downside expansion in breadth.

During the recent selling pressure, we experienced some of the highest readings in new lows since the COVID crash.

From the desk of Steve Strazza @Sstrazza

Cryptocurrencies are just more stocks.

In the stock market, we have software, internet, homebuilders, and gold miners. The powers at be do their best to classify all the publicly listed companies into industry groups. This allows us to break them into various baskets and analyze them at the index level.

In crypto markets, there are tokens focused on decentralized finance, the metaverse, smart contracts, and more. But unlike the stock market, the crypto asset class is still in its infancy. As such, there is no industry standard for how to group these different tokens based on what they do.

In our analysis, we'll often discuss what some of these tokens do. We use some indexes that are offered from data providers, as well as create custom indexes of our own as we see fit.

The reason we do this is for information. Aggregating tokens into groups and analyzing them as a whole allows us to glean insights about the strength or weakness of different areas of the crypto market.

One such group that's...

We have a new Options trade up this week.

We're Selling Puts Naked!

More specifically, we're selling short $XBI January 105 Puts for approximately $2.25 per contract

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