This week I popped into Yahoo Finance to chat with their Technical Analyst Jared Bilkre.

We discussed the potential bottom in Bitcoin earlier this week. If Bitcoin is above 30,000 then a long position makes sense. But if it doesn't, I think there's probably good support at zero. Who knows how low it can go from there. But I won't be in it, so it's not my problem.

With the Nasdaq100 Equally-weighted Index flirting with a breakout near 110 and the ARKK ETF near 130, these are the critical levels we're watching.

The Dow Jones Industrial Average, Dow Jones Transportation Average, Russell2000 Small-caps and Russell Micro-cap Indexes are all below overhead supply.

Messy for longer has been the pain trade and I think European Banks could be a big tell for the next direction of markets. We're watching that $20 level on $EUFN.

Click here to watch the video in full:

Where did all the bears go?

Have you noticed?

There aren't any left...

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

Earlier in the week, we held our June Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting 5 of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally is using various 'bottoms-up' tools and scans to complement our top-down approach.

One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small, to mid, to large - and ultimately 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.

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Steve Strazza @Sstrazza

As always, thanks to everyone who participated in last week’s mystery chart.

Responses were mixed but skewed in the bearish direction.

The point of our exercise was to question whether buyers would have the power to push prices back above our risk level… or if sellers would follow-through and validate the pattern breakdown.

If the former was to be true, we’d have a “bull-hook” formation on our hands. Some might call it a “bear-trap”. Either way, it’s bullish.

But that’s not what has happened at all. Since our mystery post, sellers have taken control as prices continued to collapse lower. 

We’re now looking at a decisive violation of our risk level. Let’s dive in to see what’s really going on and discuss why this chart is so important!

From the desk of Steve Strazza @sstrazza

This is one of our favorite bottoms-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.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've already had some great trades come out of this Smallcap-focused column since we launched it late last year and began rotating it with our flagship bottoms-up scan, "Under The Hood."

To make the cut for our Minor Leagues list, a company must have a market cap between $1 and $2B. After applying price and liquidity filters, we simply sort by proximity to new highs in order to focus on the best players.

The process of analysis is such that there are times when trends emerge and times when things are simply messy. Over the past week, with the halt in the trend of the major indices, something emerged on the charts. This something demanded attention.

Negative divergences appear when momentum does not follow the price movement. When there is a disparity between the price move and the indicator, it is a sign of caution. Not to say that a contrary position can be assumed immediately, but the sentiment certainly turns cautious!

So what is it that's hinting at being cautious in this market?

Let's take a look!

The market indices together are saying that the current trend isn't as strong as it seems. Why do we say so?

Here we have our stock universe Nifty 500. This past week's close brought along with it a negative divergence on the chart. As can be seen below, despite the price making a higher high, the indicator went on to mark a lower high. When this happens, we get an insight into the inherent strength of the market. Or in this case, weakness.

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 context of the big picture 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.

This week we're looking for a long setup in the Consumer goods sector. With the market finding its way around, defensives like Consumer goods are picking up pace.

Today we will share one such idea that stands out from a risk-reward perspective.