We put out a post recently about the breadth indicators picking up bullish signals. This was when Nifty 50 was attempting to move past its earlier high of 15,431.

Well, what do we have now? In addition to keeping track of the participation in the general market scenario, it is increasingly important to track the same indicators when new highs are claimed.

Nifty 50 managed to move past its resistance, but what do the breadth indicators say?

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood” column for the week ended May 28, 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.

From the desk of Willie Delwiche.

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

The US Dollar remains at crucial inflection points versus both emerging and developed currencies.

In last week’s note, we pointed out the critical 19 level in the WisdomTree Emerging Currency Fund $CEW, along with the numerous tests of support in our custom USD vs. BRICS Currency Index.

Not only is the USD looking increasingly vulnerable against emerging and developed currencies, but we’re now starting to see some of the major Dollar crosses break down or resolve lower.

In many cases, these moves are confirming long-term reversal patterns with USD/CAD. For example, the Dollar just broke to fresh multi-year lows relative to the Canadian Dollar.

We reviewed the chart in this column a few weeks back, highlighting the possibility of an impending double top. 

Well, here’s what it looks like now:

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 Thursday June 3rd @ 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 Thursday evening:

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.

A Big Retest For Small Caps 

Since the March lows last year, SMIDs have been the clear leadership group with higher yields as a tailwind. However, this entire relative theme has cooled off as risk assets have consolidated along with interest rates. Considering last year’s major breakdown in Small-Caps relative to Large-Caps signaled lower rates, this is a critical time and place to witness a resolution either way.

From an intermarket perspective, we’ve seen our crucial stock and commodity ratios signal lower rates in the near future. Is this signaling a
relative breakdown in Small-Caps? As always with markets, we need to play the cards we’re dealt. So while the longer-term outlook favors higher yields, we’re paying close attention to this resolution to signal a more immediate directional bias for these relative themes.

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.

Macro Universe:

Shifts are taking place for the first time in over a year.

Bitcoin just printed its second consecutive negative monthly candle, which hasn't happened since the Covid crash. Meanwhile, Ethereum was down on the month for the first time since September of last year.

Riding along in the Cryptocurrency space has been the ultimate momentum strategy. As a result, gains have far exceeded any risk asset by a country-mile.

But the same applies to the downside.

In the case where volatility's ramped up as it has, there's nothing wrong at all with sitting on heavy cash positions until a more definitive trend forms. If the history of these digital assets have taught us anything, it's that knowing when NOT to be in the trade puts us in an incredibly advantageous position.

Just take a look at Ethereum's monthly candle:

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottoms-up scans: Follow The Flow. In this note, what we do is simply create a universe of stocks that experienced the most unusual options activity - either bullish or bearish... but NOT both.

What we mean by this is that we have options experts, both internally and through our partnerships with TheTradeXchange, whereby we do all the digging through the level 2 details and do all the work upfront for our clients, in order to isolate only those options market splashes that represent levered and high-conviction, directional bets.

It's messy out there.

Breakouts are failing all over the place.

In recent weeks, it's been a tough time for any type of trend following strategy. That's because most are not trending, but rather in ranges.

When this sort of action unfolds as it has done, we play an exercise.

That is, we zoom out.

In all this gut-wrenching volatility, let's not forget the extraordinary gains this asset class has achieved over the last few years are astonishing, even after a violent 50% crash.

Consolidation is painful, but it's necessary.

Let's jump into it with a quick look at how the top digital assets performed yesterday:

I can't begin to tell you how many people have approached me in recent weeks laughing about how they're happy I'm back on the Gold train.

Why wouldn't I be? Our gold trades are working.

One thing I learned the hard way in this business is to do less of what's not working and do more of what is.

It sounds too simple but I can't emphasize enough just how important this concept is.

This isn't like a Roulette wheel of randomness. Markets trend. That's why Technical Analysis works, because we're looking for trends.

One thing we know about new lows is that they are not a characteristic of uptrends.

We know this.

So here's an update on that whole Growth vs Value thing: New Monthly closing lows all the way down the cap scale.