We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Willie Delwiche.

Key takeaway: Record highs in equity indexes buoy investor sentiment that has remained optimistic without a significant challenge over the past year. Bulls ticked higher across our sentiment indicators last week, yet we still see evidence that risk appetite is turning (NAAIM Exposure Index, NASDAQ trading volume, overall levels of options activity). These new highs and levels of optimism must contend with the undercurrents of lackluster breadth measures and an absence of pessimism. Risks lie just beneath the surface. This raises the possibility of a more complete sentiment unwind when risks are realized and prices begin to falter.

Sentiment Report Chart of the Week: Know What They Say, Watch What They Do

One of the best ways to measure actual sentiment is to watch what investors are doing with their money. Through the first six months of the year, equity ETF inflows totaled nearly $350 billion, with inflows to...

The latest All Star Charts "Follow The Flow" report is out, and once again there's a great looking opportunity there that caught my eye.

In a nutshell, the Flow report is looking at "a list of stocks that large financial institutions are putting big money behind (via options)… 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 penny."

The opportunity setting up now is in a stock in a sexy sector that looks like it's ready to resume the rocketship ride it embarked on in 2020.

Here's the rule of thumb with these things:

Just because there's no divergence in the A/D line doesn't mean the market can't correct. But if there's a divergence in the A/D line, you better pay attention.

That's what's happening here.

Remember, at first it was just the Nasdaq Advance-Decline line diverging. This one peaked back in early February. Notice how we had a divergence before the COVID crash as well:

Money flows to where it's treated best.

In the case of crypto, it's recently been the Altcoins.

Yesterday, we published a bullish note on the DeFi space, and throughout the last few weeks, we've been bullish on smaller coins down the cap scale.

When you dive under the surface and look beyond Bitcoin, there's some serious strength.

This is the video recording of our July 6, 2021 Monthly Charts Live Strategy Session

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

As US Dollar strength unfolds and US treasuries continue to catch a bid, it’s no wonder our motto around here has been bonds, cash, champagne.

It’s been working, and it continues to work!

We’ve been downright obnoxious about our tactical view of the US Dollar over the past month.

A potential bounce was developing, strength emerged, and we pointed out numerous crosses in which the dollar was poised for a push higher.

The market environment directed our focal point toward the Dollar. And now that it appears risk is coming off the table, we’re shifting our focus to the Yen.

Usually, when we talk about risk-on/risk-off behavior and the Yen, the...

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

Key Takeaway: Indexes make new highs, but action beneath the surface is not encouraging. Equity fund inflows surge in the first half. Bond yields moving lower are unlikely to support equity market strength.

• The Energy sector fell out of the top spot in our S&P 500 sector rankings last week, though on an equal-weight basis and at the mid-cap and small-cap level, Energy remains the relative strength leader. Our industry group heat map confirms this broad strength within the Energy sector.
• Communication Services and Technology are in the top two spots of our relative strength rankings. Financials and Real Estate round out the leadership group.

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 to our latest "Minor Leaguers" report.

We've already had some great trades come out of this small cap-focused column since we launched it late last year and started rotating it with our flagship bottoms-up scan, "Under The Hood."

To make the cut for our Minor Leagues list, a company must have a market cap between $1 and $2B. There are also price and liquidity filters. Then, we simply sort by proximity to new highs in order to focus on the best players only.

The goal is to catch the strongest names while they’re small and still have serious upside potential. If any of these stocks ever climb the ranks to the big leagues, the returns could be huge. We’re looking at 5-10x moves just to break into large-cap land!

Let’s dive into this week’s report and see what’s happening in some of the...

The market will always have the final say.

This is the beauty of technical analysis: there's no problem in flipping our approach as new data comes in.

While the wheels were coming off in May, DeFi was the definitive laggard.

But that's changing.

The sector looks to be gaining traction on both absolute and relative terms.