Inventories on exchanges fell by a whopping 60k Bitcoin yesterday following eight days of consecutive positive closes.

This is the second greatest negative net change in exchange balances of all time, just trailing behind the -70k change in May 2016, which preceded one of Bitcoin's greatest bull markets ever:

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 Monday August 2nd @ 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 Monday evening:

We debuted a new scan recently which goes by the name- All Star Momentum.

All Star Momentum is a brand new scan that pinpoints the very best stocks in the market. This time around, we have incorporated our stock universe of Nifty 500 as the base. Among the 500 stocks that we follow, this scan will pump out names that are most likely to generate great returns.

While we go through our lists of sectors and stocks on a weekly basis, we thought of launching a product that would highlight the names that are the strongest performers in our universe and those that are primed for an explosive move.

Just like The Outperformers scan, this is a list of stocks belonging to the sectors that display relative strength in the market at any given point in time. Since sector rotation is the lifeblood of a bull market, we will be ahead of the curve before the gears keep shifting.

From the desk of Steve Strazza @sstrazza

We're going to flip the script a bit this week with our RPP Report. We typically don't publish a report during week's where we have a monthly conference call as JC covers our positioning and summarizes our key themes and views there.

But we didn't do one last week either because we had just published our Q3 Playbook which laid out our current position in a painfully detailed manner (it was 250 pages!).

Premium members: read it here if you haven't yet.

In today's post, we're simply going to recap our "Key Themes For The Current Quarter" and update clients on some major developments that have taken place in the past few weeks.

We've got some important things to cover so let's get right to it!

The question I keep seeing goes something like this: "Will all this weak breadth finally cause a correction in the market?"

But the right question to ask isn't whether or not a correction is going to start.

It should be: "How much longer will this correction go on?"

As markets have gotten choppy lately, I've been on the hunt for more bearish and neutral trades to help balance out my predominantly long portfolio.

In this week's Follow the Flow report, Steve Strazza teed up a nice candidate for some downside exposure. The beauty is, the Options Gods are lining it up such that we can affordably take an aggressively bearish position that will pay off nicely if it works, while limiting our risk if we're wrong.

Bulls have certainly given the bears a run for their money this last week.

Bitcoin's on the verge of eight consecutive positive days...

That's impressive.

Don't just take our word for it, look out how rare events of this magnitude have been, as marked by the green arrows:

The market has moved into a sideways trading range again. Post making new highs Nifty has traded sideways for over a month now.

While the Indian market has displayed a great deal of resilience compared to other markets, we're yet to see positive breadth thrusts and moves.

Let's take a look at what the breadth analysis is pointing at, given the current market setup.

From the desk of Willie Delwiche.

Key takeaway: Optimism most likely peaked earlier this year, as options activity and equity exposure have continued to trend lower in recent months. Yet, our sentiment indicators show no signs of fear. Of course, it’s hard to imagine an environment plagued by fear when the S&P 500 and Nasdaq push to new highs. However, when we look beneath the surface new highs contract while new lows expand. It seems each day a new bearish divergence in breadth emerges, adding to the fragility and deterioration of an already shaky foundation. Without a supportive backdrop, a price correction or volatility event could lead to a meaningful unwind in sentiment.  

Sentiment Report Chart of the Week: New Highs?

The S&P 500 and the NASDAQ made new highs last week but looking beneath the surface tells a different story. There were as many stocks making new lows as new highs last week. Between the NYSE and NASDAQ, the new...

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

The current market environment demands that we adhere to our risk management protocols as strictly as ever.

It’s a mess out there!

And with each passing day, more and more signs point to these challenging conditions persisting.

There is one data point in particular that we believe is likely to remain a serious headwind for risk assets: continued strength from the US Dollar.

We’ve covered this theme in detail the past couple of months as USD has rebounded against just about every major currency we track.

As always, we will continue to monitor the dollar as it is a vital piece to the intermarket puzzle.

Put simply, when investors are seeking safety in the dollar, it’s usually happening in an environment where stocks are under pressure.

Last week, we highlighted the violation of a key pivot low in our...

There's a permeating myth that altcoins need to outperform Bitcoin for there to be a healthy bull market.

You'll often hear claims like "the Ethereum/Bitcoin ratio is making new lows, so the market can't go up."

A similar notion gets thrown in the stock market, that if equal-weight S&P 500 is underperforming its cap-weight counterpart, breadth is said to be "unhealthy".

Though, we've found that to be far from the truth.

In the case of crypto, there have been countless times where the relative leadership has not been in the altcoins, but yet the asset class did just fine.

Just a few short quarters ago, before the alt season kicked off earlier this year, Bitcoin was outperforming nearly every other major coin as seen by the continued progress in its market-cap dominance:

This is simply calculated by evaluating what percentage of the total cryptocurrency market-cap Bitcoin represents. So when this...

Key Takeaway: Indexes at new highs as new high list contracts and new lows expand. Real bond yields drop to their lowest level on record. Prices are rising as the path for growth becomes more uneven. 

• Communication Services and Real Estate swapped places near the top of our relative strength rankings for the S&P 500. While Real Estate strength persists through the equal-weight version of the rankings and down the market cap scale, Communication Services relative strength appears to be more selective.
• Our industry group heat map reflects recent strength among large-cap groups and relative weakness from the mid-cap and small-cap areas of the market.