One of the most telling and obvious risk-on indicators would be the Nifty Small Cap 100 index. Why is that so?

Because when you look at a market rally, the longevity of that particular rally can be gauged by market participation. This is something that should be viewed closely. If a particular index is making new highs, how many stocks are contributing to that move?

Is it a handful? Is it a majority of the stocks? These are data points that will hint at the inherent sentiment of the move.

So let's take a look at what the Small Cap-100 new highs are telling us.

Breadth indicators are important to see the internal structure of a market move. We get valuable insights from what we see that can help us determine the strength of the trend.

First up let's take a look at the most immediate tactical view. Let's take a look at the % of stocks making new highs//lows over a 10-day period. What we find is that as the Small cap 100 index clocked new highs, the % of stocks making 10-day highs contracted. On the other hand, we got a minor expansion in the % of stocks making 10-day lows.

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

We’ve pounded the table about historic breadth thrusts since we first saw these readings start to pop up in early June of last year.

It's now a year later, and we're still seeing them... In fact, the S&P 500 recently registered its highest percentage of new 52-week highs in history - absolutely crushing the historic reading we saw in Q4 of last year.

So, why is this important?

These extreme readings are as bullish as it gets and are a very common characteristic of the early innings of a fresh bull market. It's as simple as that, right?

Well, yes... But, not exactly...

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

Thanks to everyone who participated in last week's mystery chart.

We asked whether this chart had the momentum to finally reverse course and break loose from the grips of its primary downtrend.

The responses were mixed, with many wanting to wait for more information... In many cases, looking for confirmation of the impending breakout.

Well, not much has changed as the chart has yet to make a decisive move from this key level.

The chart was a weekly candlestick view of the MSCI Frontier Markets ETF $FM.

Let's dive in and see how we want to play this index comprised of stocks from some of the least developed countries around the world.

This is the video recording of the June 17th Town Hall Meeting w/ Willie Delwiche

06/17/21 2PM ET

From the desk of Willie Delwiche.

I planned on writing about how fishing is a great metaphor for investing. 

But I’ll have to tackle that idea another day. 

Today, I’m thinking about fishing not as a metaphor for investing, but as a metaphor for not investing -- actively stepping away to preserve financial capital. Perhaps even more importantly, stepping away to rebuild mental capital. 

Whether it's casting for trout in Oregon or trolling for salmon in Lake Michigan, getting away from our screens and electronic gadgets and connecting with the water is clarifying and restorative. It’s not just about the catch… 

Beyond fishing, it's important to cultivate places where we can get away from it all, even if for just a few moments. We need to find places where we can set aside the active wrestling with trends and troubles. Places where we can catch our breath, clarify our thoughts, and reinvigorate our souls. 

It's sure been messy out there.

There just hasn't been too much to discuss in recent weeks - volatility's contracted, and any signs of momentum have just fizzled out.

But that's not to say that there are NO opportunities; it just simply means they're harder to come by, and the probabilities of success have lowered significantly.

Despite all this messy action, we've still had a handful of trades really go our way on both the long and short sides. Buying the leaders, and selling the laggards - despite how oversimplified it may sound - is as prudent of a strategy in this environment as any other.

This chart does a great job of boiling down how we're approaching this market:

These are the registration details for our live monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Tuesday June 22nd at 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 Tuesday night:

From the desk of Willie Delwiche.

Key Takeaways:

• Breadth thrust regime from last year has expired
• Higher inflation and unbalanced asset allocations can weigh on stocks
• Global earnings revisions trends remain healthy 

2020 was a remarkable year in many ways. The rally that emerged off of the early year lows was broad-based and historically strong. It was fueled by numerous momentum surges, overwhelming amounts of fiscal and monetary liquidity, an unprecedented string of better than expected economic data, and a persistent trend in earnings estimates being revised higher. While 2021 began with some of those tailwinds intact, as we move toward the second half of the year, we want to avoid the assumption that nothing has changed as we have entered year two of the cyclical rally. 

We're going to start taking full advantage of the data coming out of our weekly Follow the Flow report and put on at least one actionable trade from this list every week. If you're not already familiar with this report, Steve Strazza puts it together each week and it highlights stocks with both unusual options flow plus interesting chart setups. Combined, these two factors offer traders a pretty unique edge to exploit.

Today's idea is in a recent IPO which might offer us some additional oomph if it gets moving in our direction.

From the desk of Steve Strazza @sstrazza

Welcome to our latest RPP Report, where we publish return tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

We consider this our weekly state of the union address as we break down and reiterate both our tactical and structural outlook on various asset classes and discuss the most important themes and developments currently playing out in markets all around the world.

And at present, markets are a total mess and full of mixed messages as most major stock market indexes continue to churn sideways in consolidation patterns, while many risk-on commodities are in corrective phases.

Humans are hardwired to find patterns where they don't exist.

Back in the day, it was beneficial for our ancestors to picture predators hiding among the leaves, even when they really weren't there. This Pareidolia kept them safe. Thousands of years on, it makes us terribly susceptible to chart crimes.

One such crime plaguing the Crypto landscape is this idea that "Bitcoin is correlated."

People argue that these digital assets are having a real consequence on the macro environment.

But the reality is that Bitcoin is far too small a market to have any intermarket relationships at all.

We debuted a new scan recently which goes by the name- All Star Momentum.

All Star Momentum is a brand new scan that pinpoints the very best stocks in the market. This time around, we have incorporated our stock universe of Nifty 500 as the base. Among the 500 stocks that we follow, this scan will pump out names that are most likely to generate great returns.

While we go through our lists of sectors and stocks on a weekly basis, we thought of launching a product that would highlight the names that are the strongest performers in our universe and those that are primed for an explosive move.

Just like The Outperformers scan, this is a list of stocks belonging to the sectors that display relative strength in the market at any given point in time. Since sector rotation is the lifeblood of a bull market, we will be ahead of the curve before the gears keep shifting.