Music week continues here at Allstarcharts with a little R.E.M. today.

Yesterday we were wondering "What's Going On?", to quote the great Marvin Gaye.

So on today's note, we'll try to answer the question: Is this, in fact, The end of the world as we know it?

And for me, the answer is a big fat NO if these two indexes are above their 2018 highs:

No, not Santa. He already came and went.

JC came to Boulder yesterday (where I Iive) and we were able to get together to enjoy a late dinner. It was a great opportunity to reflect on how far we’ve come and what we’ve already accomplished.

All Star Charts launched about 13 years ago. And we launched All Star Options nearly four years ago.

During this time, we’ve seen big bull runs, panic-inducing corrections, and everything in between.

But the one constant has been

In yesterday's note, we outlined our macro Bitcoin/crypto thesis.

In essence, the market is leaving a considerable oversold zone driven by modestly strong spot flows by whales and institutions.

Now that momentum is back in favor of the bulls on the break of 41,000, we're beginning to deploy our elevated cash positions back into Bitcoin and a variety of trades.

In today's note, we'll discuss a few names we like monitoring for long and short positions and how we're approaching price action from a tactical perspective.

Let's begin by addressing shorter time frame developments.

Today we're taking a pick from the Consumer Durables sector. There's been a slight pick-up in activity along with a big base breakout. Which stock is it?

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

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.

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...

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest Under the Hood column, where we'll cover all the action for the week ended February 4, 2022. This report is published bi-weekly and rotated with our Minor Leaguers column.

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 seeing an unusual increase in investor interest.

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

Whether...

From the desk of Willie Delwiche.

Key Takeaways:

• It takes energy to stay on top of this market.
• Follow the leader goes global.
• Higher bond yields are adding market volatility but not financial stress.

Key to last week’s shift in the weight of the evidence from bullish to neutral was the continued deterioration in breadth trends, especially in the US. On everything except the shortest of time frames we continue to see more new lows than new highs. Over the past two months, there have only been two trading days on which the...

Whenever I'm trying to figure out what's going on, I can't get that Marvin Gaye song out of my head.

But the tl;dr of it is that US large-cap stock indexes are holding support. So far, anyway.

We laid out the key levels a couple weeks back.

But also notice how we've been seeing more strength around the world, with the US acting as one of the laggards. It probably has something to do with all that growth exposure in a lot of US large-cap indexes.

Most other countries don't have that.

Here you can see the Dow Jones Composite Index holding that key 11,200 area. This is a good representation of what we're seeing in a lot of other major indexes and sectors:

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.

Rates Spike Around The Globe

Interest rates are on the rise, and it’s not just in the US and Europe. The Japanese 10-year yield hit its highest level in over five years last week. Like Germany, Japan is now back in positive territory after a half-decade of offering negative yields. All of this action is supportive of the new highs we’re seeing from the US 10-year yield. With rates on the rise around the world and the question turning into “how high” – as opposed to “if” – the FED will hike, it’s time to look for opportunities in the areas of the market that benefit the most from a rising rate environment.

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:

• Our macro universe was green this week, as 72% of our list closed higher with a median return of 1.53%.
• This week, US 10-Year Yield $TNX was the winner, closing with an 8.31% gain.
• The biggest loser was the Volatility Index $VIX, with a loss of -16.05%.
• There was a 2% drop in the percentage of assets on our list within 5% of their 52-week highs – currently at 28%.
• 13% of our macro list made fresh 4-week highs, 11...

I love when the team feels a little "frisky" and hunts for "speculative" ideas. There's nothing that gets the creative juices flowing more than getting outside the wheelhouse a bit, looking for new experiences.

This lead them down the path of picking through the wreckage in Chinese stocks.

In the recent Monthly Candles Strategy session (find the charts here), JC highlighted a couple names in China that are offering speculative opportunities for those willing to step boldly where most bulls are too sheepish to look.

As options traders, we too can join the party. But we can minimize the risk better while still participating if the speculators have their way.