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

One of the most frustrating questions plaguing investors at the moment is... "How long will this choppy environment last?"

And one question we’re asking internally is… “What is with all these mixed signals!?”

Once the latter clears itself up, we'll have our answer to the former... But not until then.

When the outlook becomes increasingly murky, the best action is to take a step back, let the smoke clear, and weigh each new piece of evidence as it becomes available.

For now, the most important evidence we have is our list of risk-on commodities and equity indexes testing critical levels of interest grows larger by the day.

There seems to be no end in sight. Complicating matters further, we’re actually seeing this kind of price action throughout the risk asset landscape. It's not isolated to a single asset class or region. We're seeing it in Stocks, Bonds, Commodities, and even Currency Markets... and not just in the US, but also abroad.

There are ...

From the desk of Willie Delwiche.

Key Takeaway: Investors finding themselves with too much Technology exposure. Speculative unwind occurring as neglected areas of the market make new highs. Inflation concerns are overdone in the near term but represent a new reality for the coming decade.

Cyclical value sectors remain atop the relative strength rankings, with Financials and Materials (both of which made new highs last week even as the S&P 500 overall lost ground) holding on to the top two spots. The big gainer in this week’s rankings is Consumer Staples, which climbed three spots in the relative strength rankings. Staples also finished the week at a new high. The industry group heat map shows improving conditions widespread among large-cap groups and deteriorating conditions widespread among small-cap groups. Actual leadership is pretty consistent across sizes and is consistent with the sector rankings.

Ok, I've changed my mind.

A few of my readers have pinged me privately drawing my attention to an Oil & Gas sector name that could possible make for a good "catch up" trade in the space. I generally would rather play in the leaders, rather than hope for the laggards to catch up, but I've been observing the price action from a safe distance after the ASC team put out a bullish idea in this name during their Monthly Charts Strategy Session a couple weeks back.

I like the way it put in a hard reversal last week and it's giving me some comfort to get in now with calls options priced pretty affordably.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood” column for the week ended May 14, 2021. This column is published bi-weekly and rotated on-and-off with our Minor Leaguers column.

In this column, we 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.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.

The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we’re...

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 few weeks ago, we put out what you could call a “lower conviction” trade idea in Gold Miners. The reason we did this was simple and boiled down to two things: 1. The risk/reward profile; and 2. The primary trend. The prior was simply too good to ignore as price tested a formidable level of former resistance turned support. And this was taking place within the context of an underlying uptrend. Fast forward to today, and that trade has worked out beautifully (see lower pane).

What’s interesting is that Treasury Bonds are now setting up with a very similar chart formation after grinding steadily back down toward the 2016 and 2019 highs, where prices are now. The question that remains is whether buyers dig in and defend this key former resistance level near 113. They have so far… And just like GDX, the risk/reward here is too good to pass up and...

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.

You can 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 as well as discuss the most important themes and developments taking place in markets all around the world.

While the weight of the evidence remains in the bull's favor, we continue to see more data arrive that suggests the environment could be shifting toward one that is less conducive to risk assets, at least over shorter timeframes.

In fact, we'd argue that bears have more talking points today than they've had at any time over the trailing year. With each passing week, data continues to suggest a more cautionary approach is appropriate...

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. We can then put these near-term developments into the context of the big picture and glean insights into 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.

• Procyclical Commodities gave back some of their recent gains this week.
  • Copper was down over 2.34%. However, the primary trend remains intact with momentum in a bullish regime.
  • Lumber was the hardest hit this week, dropping over 7% reversing its extreme momentum reading from last week to 64 this week.
• New short-term lows across the board in many US equity indexes, from the S&P to Dow Utilities, and even SMIDs...

What do you want from me?

Do you want me to tell you that it's just all rainbows and butterflies?

Is that why you come here?

Or is it because you know I don't give a shit, and I'm just going to give it to you straight every time?

So here's the deal.

We had a heck of a run. That was one of the best 1-year returns of all time.

What more do you want?

Give it a rest. Let Year 2 play out and see if it's like all those others. So far it's exactly like them.

We've seen a ton of relative strength out of the Value areas of the market: Financials, Natural Resources, Industrials...

Those are the areas where we've wanted to be as money has rotated out of Growth.

But now our upside objectives are getting hit all over the place. We laid all that out 2 weeks ago in great detail.

And now the Dow Jones...

This week we're looking at a long setup in the Fertilizer space. We've noticed a growing trend in this sector and have covered more stocks here.

We retired our "Five Bull Market Barometers" in mid-July 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.

Over the past few days as the market continued to churn sideways, we witnessed a set of stocks doing well as a group. As sector rotation continues to play out, we see different groups play the game of musical chairs as they move in and out of strong and weak zones.

Fertilizer stocks seemed to have gotten activated recently and there a few names here that we've been tracking for some time.

Let's take a look at the individual names:

The first one here is GSFC. Gujarat State Fertilizers & Chemicals. What we see here is a three-year base breakout with the price moving past its long-term resistance of 114. As the overhead supply has been absorbed at these levels, the price is now ready to move higher in the next leg of the rally.

The indicator has been in the bullish momentum territory, staying rather close to this zone during interim corrections as well.

We are bullish above the level of 114 with a target near 167.

Click on chart to enlarge view.

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

Lumber futures have been on an absolute tear since last spring. The vertical but volatile price action off last year's lows is something for the history books.

After trading down to 250 in late March of 2020, Lumber has since shot back above 1,600, where it trades today. It’s no wonder social media is full of people flaunting their wealth with stacks of timber. 

But we have to ask... is it time for a pullback? Is this rally overdone here? 

Let’s take a deeper look and discuss why we believe the logical move for Lumber over the short term is sideways... or even lower.

Here’s the chart. Look at that face ripper - up nearly 7x in just over a year!

Lumber futures just barely sliced through our target of 1,636 last week, yet have fallen back below that level in recent sessions.

This action...