From the Desk of Louis Sykes @haumicharts

In the arsenal of every trader and technical analyst lies a countless number of indicators, metrics, and tools.

Everyone in the business is aware of the classic indicators: moving averages, Fibonacci extensions, momentum oscillators... the list goes on.

Perhaps one of the most valuable tools is the AVWAP. This is merely a representation of the average price by volume anchored to a specific time.

The AVWAP works because it takes advantage of human psychology. It's universally accepted within the scientific community that humans are driven by a slew of biases. Ask any trader, and they'll attest.

An incredibly common heuristic that drives much of the financial industry is the age-old anchoring bias. Many traders irrationally make decisions solely based on the price they paid for a stock.

In this sense, the market is driven by these participants responding to supply/demand dynamics within the context of their personal anchoring.

When the worst stocks on the planet can't go down any more, that's usually good information.

We saw a lot of Small-cap Growth, Arkk Funds, Biotech, Chinese Internet and many of those other "Growthy" areas bottom out this Spring, and some of the last ones in June.

At the Mega-cap level, nothing caused more shareholder wealth destruction than Facebook, down 60% from its highs less than a year ago.

But look where prices stopped falling:

New Bull Market or just a Bear Market Rally?

That's the question I keep seeing.

And it's a fair one to ask.

Thanks to everyone who made it live last night for our Monthly Charts Strategy Session.

With a few breadth thrusts in recent weeks, and a little preview of what a weaker dollar could do to this market, we had plenty to talk about.

This question included: New Bull or Mean Reversion in a Bear?

I think the S&P500 tells an interesting story. You've got that massive top that formed throughout the past year, completing with a break of support this Spring.

And after further selling, the bounce has brought it back all the way to the neckline. These are the "trenches":

From the Desk of Ian Culley @IanCulley

It doesn’t matter which way you slice it. The current market environment is a US dollar story.

Whether you’re talking about stocks or commodities, a rally in risk assets isn’t happening against a rising dollar.

It’s that simple.

You probably think I say the same thing every week. That’s because I do.

Of course, I throw in a well-defined trade setup here and there, but always within the context of the dollar and its impact on the major asset classes.

It’s that important. 

As the US Dollar Index rally is well underway, it’s interesting some individual USD crosses are finding resistance at historical levels of interest to both the currencies involved and risk assets!

Here’s a chart of the US dollar/Swedish krona cross zoomed out to the late 1990s: 

This is the video recording of our August 1st Monthly Charts Live Strategy Session

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.

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.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

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.

Did you see what just happened last month?

Financials went back and kissed the same prices they hit at their peak just before the Great Financial Crisis.

This is easily one of the most important price levels in stock market history. And I heard no one talking about it.

Meanwhile, the Home Construction Index did the exact same thing. In this case, even more special. The peak in Home Construction was when the fund launched, which is both classic and hilarious.

Here's what these retests look like:

Last week I jumped on to Fox Business to talk markets with Charles.

He asked me about S&Ps, Russell2000 Small-caps, US 10yr Yield and Bitcoin.

It's funny, I don't think I've ever agreed this much with a TV anchor in my life.

His Technical Analysis was spot on.

So the setups are certainly there. But I think the catalysts are where we focus. And I believe that continues to be the Dollar and Rates.

Here's the full clip:

Are you watching?

Look what stocks and Crypto do with just a little tiny bit of Dollar weakness.

In fact, US Dollar Index Futures are only down 3.0% off the highs.

And look how stocks have done since the Dollar stopped going up a couple of weeks ago:

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

From the desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that which you can check out here.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list: