From the desk of Willie Delwiche.

A few weeks ago, we outlined our patient approach in the altcoins.

Our argument was as follows:

We’re approaching this market with a high degree of patience until a higher conviction setup has been formed.

This remains a messy, low-conviction tape to be positioned aggressively long.

Since then, most alts have trended considerably lower, and there's been little reason to be heroic in buying dips.

But, as we discussed in yesterday's note, there are a few bullish data points creeping in that could turn the tide for the alts.

Many names now sit at support, while others are in the process of putting in failed breakdowns sporting bullish momentum divergences.

In simple English, this is a good first stepping stone to carving out tradable bottoms.

It still cracks me up every time I hear that.

"German 10yr Yield is still dealing with resistance at zero".

Is it funny to you too or am I just being a child?

Anyway, joking aside, this is the first time in years that German 10yr Yields have been above zero.

Rates in general have been moving higher, not just in the U.S., but around the world.

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-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.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest “Minor Leaguers” report.

We’ve had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

We recently decided to expand our universe to include some mid-caps…

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

The way we did this is simple…

...And trading volumes are particularly good for the trading exchanges that make it all happen!

With the markets whipsawing back and forth to start the year and trading volumes rising all over the place, the exchanges that extract fees for every stock share, futures contract, or options contract that trade at their venues are seeing their revenues rise.

Couple this with some strong relative performance in the stocks, and we're setup for a very nice bullish move -- should we get it.

Today's trade is in a one such name that facilitates all kinds of trading.

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts 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.

Testing Former Resistance

We've been pounding the table on the importance of defending the 2018 highs for a long time. These levels represent when risk assets peaked four years ago. The chart below shows the Value Line Geometric Index pulling back to its 2018 highs. This index measures the median stock performance and is an excellent way to view how the overall market is doing. Right now, it’s telling us that the average stock has endured significant damage and has erased almost all of the progress from recent years. Bulls really want to see these 2018 highs hold. If they do, the bias is still higher and the structural trend is intact. But if this level is breached, it will be a major bearish development for the broader market and risk assets in general.

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 big picture context 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:

For a while now PSU Banks have been performing better than their counterparts-Private Banks. We have another name popping up from this sector.

Let's take a look at the trade for this week!

For some time, we've had a neutral outlook and have been in heavy cash positions.

There's been little change in our approach since the publication of our previous Monday report, but we have seen a handful of data points in favor of the bulls.

As we'll cover in today's report, the institutional capital that left in October is starting to come back in, and exchanges have seen a moderate outflow over the last week.

Moreover, traditional markets seem set up for a tactical bounce. What has been a headwind could be turning into a tailwind.

These are great first stepping stones toward a more constructive picture for the crypto market, but one of our two criteria for more aggressive long positions has not been met as of yet. That is:

• Bitcoin dips to 29,000;
• strength above 42,000.

This is a tape that still commands patience.

Let's dive in.

We retired our "Five Bull Market Barometers" in 2020 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.