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 performance was mixed this week as only 62% of our list closed higher with a median return of 0.22%.
• The biggest winner of the week was the Volatility Index $VIX which gained 6.05%.
• 10-Year Yield $TNX shows continued weakness as this week’s biggest loser, dropping -3.65%.
• Momentum remains constructive from a structural perspective, as 60% of the assets on our macro list are in a bullish momentum regime....

There's a reason long-time investors are invested in low volatility household names that pay steady dividends: because over the long run, they work! The steady dividends and low volatility can be counted on to take care of us in retirement. This is a lesson I've been trying to teach my 7-year old Son. We created a small account for him and we're teaching him the power of investing in what you know (or in our case, in companies we spend money on as a family) and in companies that pay dividends which teaches the power of compounding.

One of those names we're invested in is also now showing up on All Star Charts momentum scans and may be set to accelerate its price price action.

This is the video recording of the August Options Conference Call with Sean McLaughlin & JC Parets.

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.

One of the biggest things the bears have going for them right now is the fact that the 10-Year Yield is trapped beneath the critical 1.40% level. As long as that remains the case, the trend is lower for rates, and higher for US Treasuries. But we want to stay keenly aware of any signs of a trend reversal as we continue to see a barrage of mixed signals when it comes to risk appetite around the globe.

In the chart below we’re looking at an island reversal formation in the 30-Year which recently sent the yield back above its key 1.90% level. Why are we looking at the 30-year? Don’t we usually use the 5-Year as a leading indicator? As always, the tools we want to use boil down to the kind of market we’re in. Right now yields are trending lower while spreads are contracting. This tells us that the long end of the curve is moving at a faster rate than the short end. For this reason, we’re...

Regardless of the market environment, we always want to be pushing our bets on secular leaders.

The most effective way of positioning ourselves with the strongest (or weakest) names is through relative strength analysis - by simply comparing names to their counterparts.

So before we dive into all some of the names we're buying, let's address where this space finds itself, and what we're anticipating in the coming weeks and months.

OK so 2 quick charts for you.

The first one is Johnson & Johnson trying to break out of a 6-month base.

Today we're going to take a look at a long setup in the Chemicals space. This stock has broken out of a big base, and is demanding attention!

Let's take a look at this name.

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.

The Nifty Metals Index is now trading at new all-time highs. At a time like this, it becomes crucial to identify the constituents that are displaying strength.

Let's take a look at some of the names in the Metal Index that are at interesting levels.

After a pause of two months, the Metals Index has broken out above its prior resistance and looks good for a dash ahead! New all-time highs come at the back of participation from the index constituents.

So which names are we looking at in the weeks and months ahead?

First up, is Hindalco.

Hindalco featured in our Trade Ideas pretty often in the first quarter. After a brief pause, the stock looks ready to rally with the break out above the level of 407. The indicator has continuously displayed strength and has been hovering around the bullish regime.

With the move above 407, the stock is trading at an all-time high!

We are bullish above the level of 407, with a target near 606.

Click on the chart to zoom in.

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.

Let's dive in and...

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:

But I do have some good news.

I woke up to this gem today.

Usually, by the time the Economist gets wind of a trend, to the point where they even make a cover out of it, we're usually no where near the beginning of that trend.

...

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.

Steel has relentlessly pushed to new highs --we can’t wait to see those monthly candles! Tin followed through to the upside after last week’s...