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 positive, with 70% of our list closing higher with a median return of 1.46%.
• Oil $CL was the winner, closing with a 16.54% gain.
• The biggest loser was Dow Jones Utilities $DJU, with a weekly loss of -2.82%.
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 6%.
• Only 11% of our macro list made fresh 4-week highs.
• ...

From the Desk of Kimmy Sokoloff

This market is not for the faint of heart. It'll whipsaw you around, so you must be diligent. Failing that, it's best not to trade.

Just because I'm taking a trade doesn't mean you have to. 

Running Out of Energy

A 14% rally in Energy last week (its 3rd best weekly gain in at least the past 30 years) was not enough to keep the long-term in the Energy sector from rolling  over last week. This follows the down-turn in the long-term trend in commodities that we discussed last week. 

The Details: The longest sustained up-trend in the Energy sector since prior to the Great Financial Crisis has ended. The trend for the Utilities sector also turned lower last week. For the first time since the COVID crisis none of the 11 sectors in the S&P 500 are currently in up-trends.  

More Context: Energy has been an island of green surrounded by a sea of red this year and is still up nearly 50% YTD. But over the past 30 years, all of the net gains for the sector have come within an established up-trend. With the trend rolling over, investors looking for safe harbors have even fewer options...

Here's a snippet that sums up a conversation I had with my Head Technical Analyst Steve Strazza this morning:

Me: Any trade ideas have you excited this morning?

Steve: Nothing. New lows everywhere today.

Me: I know. It's ugly.

Steve: I can give you a handful of nice charts that are breaking out, but they are all going to fail. Can't buy breakouts in this market.

Yep. That's where we're at. Putting on directional bets in either direction feels like a high risk proposition. Long breakouts are likely to fail, while short breakdowns are likely to get caught offsides in a wicked bear market dead cat bounce.

But this doesn't mean we're out of options to earn some profits. Options premiums remain elevated across the board, and we've got some areas with clean levels of support we can use as guiderails to sell some delta-neutral premium with higher-than-normal chances of success.

We've adjusted a position in the Paid-to-Play portfolio today:

As we turn the page on another quarter in the crypto markets, we leave behind yet another period of aimless price action.

Bitcoin ended the period unchanged after giving back some of its slight gains earlier in the quarter. The leadership was outside Bitcoin, as Ethereum sported some modest gains.

Other names, like Polygon and Binance, are well above the lows achieved in the mass capitulation event in June. This came after Ethereum completed the transition from Proof-of-Work to Proof-of-Stake.

In bear markets you'll find that the majority of stocks are making lower lows and lower highs in price.

With basic arithmetic, we can call those downtrends.

Using that same math, in order for stocks to be in uptrends, they first need to stop making lower lows.

"They need to stop going down before they can start to go up", is how I learned it.

Going through my charts this weekend, I found this chart right here pretty interesting.

The last time Mid-caps, Small-caps and even Micro-caps made lower lows was almost 4 months ago:

From the Desk of Kimmy Sokoloff

We have the Consumer Price Index data for September coming out on Thursday morning, and we have more Fed speakers this week as as well. Expect more tough talk about inflation.

Should the $SPY break down below 360.94, we can potentially head to the lows of 357.04.

I'm monitoring the $QQQ as well to see if it touches the lows at 267.01.

The most significant insider activity on today’s list is a 13G filed by Baker Bros Advisors LP.

The hedge fund revealed an increase in ownership from 7.7% to 10.9% in the small-cap biotechnology company Rhythm Pharmaceuticals $RYTM.

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.

A funny thing tends to happen near the end of important trends.

The journalists finally catch on.

It's never at the beginning of trends. That's not when they get excited.

It's when everyone has finally agreed that a trend is in place, which by definition, is late in the cycle.

You see, the journalist community does an amazing job of aggregating consumer & investor sentiment. I find they are the very best at this.

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.