From the desk of Steve Strazza @sstrazza

This is one of our favorite bottoms-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 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 bottoms-up scan, "Under The Hood."

To make the cut for our Minor Leagues list, a company must have a market cap between $1 and $2B. There are also price and liquidity filters. Then, we simply sort by proximity to new highs in order to focus on the best players.

From the desk of Steve Strazza @Sstrazza

A major theme we've been hitting on in recent months is that we've reverted to an equity market landscape dominated by US Large-Cap Growth stocks. 

So we know that's where the strength has been. But up until March-May of this year, these relative trends had actually been favoring Small-Caps and Value, and even other parts of the world over the US.

So was this just a counter-trend rally, or the beginning of a sustainable rotation? The real answer is it depends where you look and how you look at it.

But we are definitely seeing some developments that suggest there could be a rotation back in favor of value-oriented and cyclical stocks in the near future.

This becomes particularly clear when we look at the relative trends of some of these groups vs the S&P. And if we see these industry groups break out on an absolute basis - which many of them already are - this could be the extra juice needed for a true relative trend reversal that would put value back in the driver seat.

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.

There's the good, there's the bad, and then there's the ugly.

Here are a few things that I'm thinking about right now....

First the obvious and arguably the ugliest. 

Emerging Markets are getting crushed. And it's not just a China thing. It's been broad-based selling in most emerging markets.

You also see it spilling over into stocks like Industrial bellwether Caterpillar that tend to move with EM:

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

We can’t ignore the resiliency in base metals. 

Despite the classic year-two chop, base metals have remained buoyant while many other risk assets have come under pressure. They’ve even gained ground during the recent bout of US dollar strength. 

And now we’re beginning to see signs of serious leadership emerge as Crude Oil consolidates its recent gains. The broad-based strength beneath the surface for this procyclical group of commodities has been undeniable. These risk-on metals have been the steadiest performers within the entire asset class for the better part of this year.

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

We’ve been super obnoxious about the deterioration in new highs we continue to see in the US.

But the major averages haven't been phased a bit. The S&P 500 and other large-cap indexes keep charging to new heights.

Yet when we look beneath the surface, we're hearing a different story… The vast majority of stocks have NOT been making new highs along with the averages. In fact, we’re beginning to see an expansion in new lows. 

This is a new development that's commanding our attention right now, mainly because these are the weakest conditions we’ve seen many of our breadth measures since last year. 

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Monday August 2nd @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday evening:

From the desk of Steve Strazza @sstrazza

We're going to flip the script a bit this week with our RPP Report. We typically don't publish a report during week's where we have a monthly conference call as JC covers our positioning and summarizes our key themes and views there.

But we didn't do one last week either because we had just published our Q3 Playbook which laid out our current position in a painfully detailed manner (it was 250 pages!).

Premium members: read it here if you haven't yet.

In today's post, we're simply going to recap our "Key Themes For The Current Quarter" and update clients on some major developments that have taken place in the past few weeks.

We've got some important things to cover so let's get right to it!

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

The current market environment demands that we adhere to our risk management protocols as strictly as ever.

It’s a mess out there!

And with each passing day, more and more signs point to these challenging conditions persisting.

There is one data point in particular that we believe is likely to remain a serious headwind for risk assets: continued strength from the US Dollar.

We’ve covered this theme in detail the past couple of months as USD has rebounded against just about every major currency we track.

As always, we will continue to monitor the dollar as it is a vital piece to the intermarket puzzle.

Put simply, when investors are seeking safety in the dollar, it’s usually happening in an environment where stocks are under pressure.

Last week, we highlighted the violation of a key pivot low in our G-10 Ex-US Currency Index.

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottoms-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 Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood" column where we'll cover all the action for the week ended July 23, 2021. This report is published bi-weekly and rotated on-and-off 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.

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.

I rip through more charts than almost anyone in the world. 

Here's the bottom line. Some stocks are going up, most stocks are not.

That's the answer.

You want know what's up? That's the deal.

So are more stocks going to start going up too? 

Maybe.

But right now that's the trend. Mostly a choppy sideways hot mess, with some stocks resolving those consolidations higher.

One thing I will add, however, is the lack of downside resolutions.

We're just not seeing these stocks and indexes breaking down and holding down. Or at least, we're not seeing more and more of them do that.