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

While breadth has improved in recent weeks and months, the bulls still have their work cut out for them.

When we consider all our breadth indicators in aggregate, the evidence remains mixed. What else is new!?  It’s been that way for the majority of this year.

Many of the major indexes made new all-time highs this week. Meanwhile, some advance-decline lines are moving higher, but others are moving lower. Some are at the top of their range, but others are at the bottom of theirs.

The advance-decline line measures stock market breadth based on cumulative net advances. In other words, it takes the number of advancing stocks on a given day and subtracts the number of declining stocks. That number is then added to the previous day’s value, creating a cumulative advance-decline line.

A/D line divergences occur when price is making new highs and the A/D line is...

This is the video recording of our October 29, 2021, All Star Charts Crypto Weekly Strategy Session.

From the desk of Willie Delwiche.

Plenty of time is wasted and much virtual ink is spilled pulling apart and putting back together various pronouncements by the Federal Reserve and other central banks. With an FOMC meeting on tap, this coming week will likely be more of the same. Rather than focus on what central bankers are saying, it might be more productive to watch what they’re doing. The average central bank (Fed, ECB, BoJ, PBoC) balance sheet has expanded by 10x over the past 20 years (that’s a 25% increase per annum). There is no realistic expectation that balance sheets will contract any time soon. But the pace of expansion is likely to slow (the Fed is expected to announce a timetable for a tapering of its balance sheet expansion this coming week), and interest rates around the world are on the rise. All of the net gains for global equities over the past 30-plus years have come when a majority of central banks have been in easing mode. Currently, just under 60% of central banks are still easing. But, as inflation remains persistent, we expect the number to fall and liquidity headwinds to rise.

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The team is out with a bearish piece on US Treasuries this week. Have a read. In it, they lay out the case why we should be looking to position for further downside trading action in a variety of Treasury instruments.

It's been a while since I've had an opportunity to put a Bear Put Spread on, and these setups look like good candidates for them.

This is the video recording of the October 28th Weekly Town Hall w/ Willie Delwiche & JC Parets

10/28/21 3PM ET

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

Long-term interest rates have taken a hit this week, while the short end of the curve has continued higher. When we zoom out a bit, yields have been rising across the curve since this summer.

During the past few months, the 2-year yield has ticked higher by more than 30 basis points (bps), the 5-year has increased by almost 60 bps, and the 10-year has gained 40 bps. But when we look all the way out to the 30-year, it's only risen by roughly 20 basis points.

Rates are rallying across the board, Treasuries are trending lower, and bond market investors are favoring TIPS and higher-yielding securities.

How do we want to position ourselves in this kind of environment?

Well, we definitely don’t want to be buying Treasury bonds.

In today’s post, we’re going to take a trip around the fixed-income market and discuss some US Treasury funds we can use as vehicles to express our thesis.

Let’s...

In yesterday's note, we outlined our tactical short if Bitcoin was below 59k.

We gave the bears the benefit of the doubt, but they couldn't keep prices under 60k for long at all.

We have no shame in being wrong and flipping our approach as new data comes in. In fact, we pride ourselves on always adapting to new evidence and never being dogmatic. The quicker we know we're wrong the better, because we can move on to bigger and better opportunities. In this case, we knew in just a few short hours!

This seems like a textbook failed head-and-shoulders pattern right now:

We like it best when patterns don't work, because it can create a major whipsaw that can send prices immediately higher. For a deeper dive into why this is the case, read this old post of ours.

So, with our shorts positions quickly closed, it's now irresponsible to be short if Bitcoin'...

From the desk of Willie Delwiche.

"We make our decisions, and then our decisions make us."

I came across that quote in a book I was reading this week (no apologies here -- I read books -- that's what I do).

That prompted me to think about how it was this time last year that I had some decisions to make about what was next in my professional journey. JC and I talked about my joining the All Star Charts team. I (we) made the decision to do just that -- and while the impacts of that decision continue to unfold, I've not regretted it for a moment. And knowing what I know now, that decision seems more obvious than it did when I made it a year ago.

It's not just the active decisions that form us. Where we pay attention matters as well. The 18th century poet William Blake was ahead of his time when he observed how "we become what we behold."

A couple of days back we were mentioning the areas of the market that looked weaker than the others.

Today, we are here to discuss the areas of the market where despite today's correction, we saw some strength.

Using relative strength charts for analysis is a great tool to have. But there is another way to look at it. When the market is correcting and certain stocks are going up, that is information. That is relative strength. And vice versa of course.

So let's take a look at the sectors that were displaying strength.

From the desk of Steven Strazza @Sstrazza 

*** Click here to read the reveal post for this Mystery Chart ***

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.

While you can try to guess the chart, the point is to make a decision…

So, let us know what it is… Buy, Sell, or Do Nothing?

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

We use a wide variety of bottom-up tools and scans to complement our top-down approach. This makes it near impossible for us to miss out on favorable trading opportunities.

One way we do this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and a myriad of others – would have been on this list at...

Over the last week, we've raised attention on the increasing leverage being introduced in the derivative markets elevating the downside risks of the overall crypto market.

We were seeing this with record-high open interest across the board and excessive funding in the face of declining prices.

This morning, we've seen this downside risk play out in some respects, with $200M worth in Bitcoin positions getting liquidated over the last 24 hours, quickly sending prices below 60,000.