There's a permeating myth that altcoins need to outperform Bitcoin for there to be a healthy bull market.

You'll often hear claims like "the Ethereum/Bitcoin ratio is making new lows, so the market can't go up."

A similar notion gets thrown in the stock market, that if equal-weight S&P 500 is underperforming its cap-weight counterpart, breadth is said to be "unhealthy".

Though, we've found that to be far from the truth.

In the case of crypto, there have been countless times where the relative leadership has not been in the altcoins, but yet the asset class did just fine.

Just a few short quarters ago, before the alt season kicked off earlier this year, Bitcoin was outperforming nearly every other major coin as seen by the continued progress in its market-cap dominance:

This is simply calculated by evaluating what percentage of the total cryptocurrency market-cap Bitcoin represents. So when this...

Key Takeaway: Indexes at new highs as new high list contracts and new lows expand. Real bond yields drop to their lowest level on record. Prices are rising as the path for growth becomes more uneven. 

• Communication Services and Real Estate swapped places near the top of our relative strength rankings for the S&P 500. While Real Estate strength persists through the equal-weight version of the rankings and down the market cap scale, Communication Services relative strength appears to be more selective.
• Our industry group heat map reflects recent strength among large-cap groups and relative weakness from the mid-cap and small-cap areas of the market.

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...

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.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

Watch this video for a "behind the scenes"...

The team pumped out the Saturday Chartoons letter this weekend and as always, there were some nuggets of wisdom and ideas to be found therein.

The tone overall is: we're in a tricky spot here. There are some stocks going up, many stocks going down. But in sum, we're kinda stuck in the mud here for a little bit, it appears.

Of course, if this continues for a bit, then we'll want to keep our eyes out for more delta-neutral credit spreads to add to our portfolio.

There's one sector ETF that was specifically highlighted in this weekend's letter that fits the criteria I look for.

It's fair to say that bulls scored some points in the last few days, with Bitcoin moving back up to the upper 30,000's.

Throughout this recent rally, it was pretty clear that there was a lot of squeeze-action going on, as over $900M in Bitcoin shorts were liquidated in the last 24-hours...

Or as we like to say around here, from failed moves come fast moves in the opposite direction:

Just take a look at momentum registering its highest reading since April, following that notable bullish divergence...

It's also constructive to see Ethereum holding its head above 2,250, which is been a critical long-term level:

Seeing buyers dig in where they needed to is a great sign of much-needed progress for this beaten-up asset class.

But, there's still work to be done.

Particularly in the short term, Bitcoin is still trapped beneath...

The market has spoken.

If you're not long Crypto in one form or another, that's makes you short by default.

Do you want to make sure you underperform? Keep Crypto out of your portfolio.

These are the current circumstances and consequences.

Here we're looking at the ratio between Bitcoin and the S&P500:

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 context of the big picture 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.

• Our macro universe had a positive week, with 72% of our list closing in the green with a median return of 0.36%.
• After multiple weeks of selling pressure, Lumber $LB was finally the big winner as it booked an 18% gain.
• Despite spiking higher on Monday, the biggest laggard this week was the VIX index $VIX, with a loss of -6.78%.
• Several US Large-Cap Growth indices finished the week at all-...

From the desk of Steve Strazza @Sstrazza

Our Top 10 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.

This week’s new highs for the major averages lacked confirmation from their peer indices once again. A topic we often discuss is "Modern Dow Theory." That is, instead of solely evaluating Transports and Industrials for a reading on the broader market, we should also consider the performance of Semiconductors as they’ve become the modern medium for economic transportation.

Despite the Dow Industrials ripping back to close this volatile week out at fresh highs, we’re still not seeing any confirmation from either of these critical indexes. And when we look at the Transportation Average, there is reason for concern as we’ve seen nothing but steady weakness since prices peaked in early May. As for semis, they continue to hold their own but remain trapped in a holding pattern beneath their April highs.

A decisive...

Today we're going to take a look at a long setup in the Cements space. We initiated a buy on this stock in the month of April and from the looks of it, we now have to update the target!

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.

We're back to discuss some commodity ideas that are looking good at current levels. For the longest time, we've been looking out for a commodity supercycle. Over the past few months, we saw base metals halting their move and digesting their gains. But there are certain pockets that are demanding our attention so we thought what better than to share them with you!

Nickel is trading at lifetime highs, ladies and gentlemen! That's big news coming at a time when we're seeing a mess in most asset classes and markets. With the close in the week gone by, the base metal moved past its resistance and closed above it.

As we can see below, the price was finding it difficult to get past the level of 1,425. Now with that out of the way, we're looking at a target of 1,630 in Nickel. 1,425 will continue to act as the risk management level. If we know anything about the recent move in base metals, then we know not to put all our eggs in one basket.

Several premature breakouts later we've reached this point. So it is all the more important to be clear about your risk management level!

Click on the chart to zoom in.

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