From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as “a market of stocks.”

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we’re also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

We...

Every idea that we put on at All Star Charts starts with a technical setup that we like. We are students of price action and that supercedes everything.

It's nice when our technical analysis lines up with "other" factors that may support our idea, be they fundamental, news, or in this case, insiders and activist activity.

Here's what our team noticed in an email to ASC subscribers earlier this week:

The most significant insider transaction on today’s list is a Form 4 filing for Pinterest $PINS.

We wrote about PINS on July 15, when Elliott Management announced a large activist stake.

Now that the second quarter blackout period is behind Pinterest, CEO William J. Ready is also buying shares. He just reported a rather sizable $5 million purchase.

We can’t think of many things more bullish than the CEO getting involved...

Was this just a bear market rally?

Or did we just see the initial thrust off the lows before a more sustainable move progresses into the end of the year?

That's a good question to be asking.

And while we don't ever actually know until after the fact anyway, we've set these 2 levels as clear lines in the sand for arguably two of the most important assets on the planet: The S&P500 and Ethereum.

The bottom line is this: If the S&P500 is above 4200 and Ethereum is above 1800 - YOU CANNOT BE SHORT.

From the Desk of Ian Culley @IanCulley

How funny would it be if the US Dollar Index $DXY peaked with the expectations of a 100 basis point rate hike last month?

And what would that mean for risk assets and the stock market rally?

These are just a few questions that float across my mind as I look through currency charts.

To be clear, the DXY isn't showing any signs of a top. Momentum remains in a bullish regime, and the index is holding above the upper bounds of its former range. 

I’m not going out on a limb here and calling a top in the US dollar. Instead, this is all about execution and remaining receptive to all possibilities.

Are you seeing Small-caps breaking out to new 4-month highs relative to Large-caps?

This underperformance in Small-caps began in Q1 2021 which, among other things, sparked the beginning of the bear market.

This week would mark the 18-month point, if a bear market is even something we're still in.

This kind of outperformance from Small-caps is not something we've seen over the past 18-months.

In case you were wondering what we've been up to lately, well here you go.

I couldn't be more excited to announce the launch of our new app: Rangefinder.

We've never received so much demand and feedback from our audience in our 10+ year history here at Allstarcharts.

Don't wait another minute. Check it out for yourself:

From the desk of Steve Strazza @Sstrazza.

Welcome to Under the Hood, where we'll cover all the action for the week ended August 5, 2022. This report is published bi-weekly and rotated with our Minor Leaguers scan.

What we do here is 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.

Watch this video for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity...

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.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.

Then we flip through our list of stocks flashing unusual...

Why do people use the 200 day moving average?

The real answer is because a lot of charting software packages the past few decades have set it as a default.

But you also hear guys like Paul Tudor Jones talk about how below a 200 day moving average, you get out. In other words, bad things happen below the 200 day.

For me, I have reasons for doing everything. And while I understand that there are more like 252 trading days in a year, not 200, I still believe that if a stock is below its 200 day simple moving average, it's probably not in an uptrend.

This is specifically for my personal definition of an intermediate-term timeframe. I like to look out weeks and months, not years, and certainly not hours or days.

200 days is a good number for me. And while it's not perfect (hint: nothing is) looking at the percentage of stocks above their 200 day has historically given us some great washout signals.

Have you noticed that the worst stocks on the planet stopped going down?

Chinese Internet bottomed in March. We're in August.

Cathie Wood's ARKK Fund is making new 3-month highs. Biotech is making new 4-month highs.

And now here comes Software!

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 Ian Culley @IanCulley  

Energy futures are beginning to crack under pressure.

Crude oil and gasoline are breaking down to their lowest levels since February. And heating oil isn’t far behind, as it’s challenging the lower bounds of a similar distribution pattern.

It appears that the bears have finally come for energy.

Since we already laid out our short idea for crude oil futures in a recent post, today, our focus is on the energy sector and the implications these breakdowns carry for energy-related stocks.

Here’s a chart of the Energy Sector ETF $XLE:

When it comes to XLE, 80 is our level. It coincides with a shelf of former highs and an area of overwhelming supply. If it’s below those former highs, the energy sector represents downside risk and opportunity cost.

These are two things we do our best to avoid.

Remember, when we buy stocks, ETFs, or commodities, we prefer to buy high and sell higher. The idea is to buy...