From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

As we near the close of another month, crude oil is once again front and center.

At the end of October, black gold was ripping to new seven-year highs while interest rates rose and cyclical stocks kicked back into gear. 

Today, this picture has dramatically changed. 

Crude oil is currently about 20% off its highs, as prices have collapsed back below our risk level.

Crude dropped $10 during last Friday’s volatile session and continues to slide lower this week. Just look at this bearish candlestick on the monthly chart:

Not only is this an ominous candlestick formation. It's also occurring at a key level of interest at the multi-year highs from 2018. This failed breakout is setting up nicely for a fast reaction to the downside. 

Most commodities were already in consolidation phases ahead of the recent sell-off. Now the entire...

From the desk of Willie Delwiche.

With volatility on the rise and increased evidence of fissures beneath the surface of the market, we have reduced equity exposure in our Tactical Opportunity portfolio. The deterioration at this point has not been significant enough to warrant reducing equity exposure in our Cyclical portfolio, though we have made some changes there as well to stay in harmony with the relative leadership trends we are seeing both in the US and globally. 

For every asset you own, it's essential to understand its drivers.

We do this all the time when looking at the components of ETFs and funds and evaluating intermarket correlations, and crypto shouldn't be any different.

As we outlined in yesterday's note, the recently observed increased correlation between Bitcoin and legacy markets is something to be mindful of in the near term.

Volatility in the macro environment is likely to be a headwind for most major crypto assets in the coming weeks.

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...

From the desk of Willie Delwiche.

Key Takeaway: Cyclical rally needs to prove its strength. New lows and expanding downside volume suggests more fissures beneath the surface. Focus on Value Line Geometric Index for evidence that downside risks are building.

• Financials sector has continued to slip in our relative strength rankings, falling to its lowest level in over a year and dropping out of the leadership group.
• Consumer Staples remain toward the bottom of the overall rankings, but have been the top-ranked sector on a short-term basis and we are seeing evidence of improving trends at the industry group level across market capitalization levels. 
• Large-cap health care is rising in the rankings, but this strength is not echoed at the mid-cap or small-cap level (or even on an equal-weight basis at the large-cap level)

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 November 26, 2021. 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 that are seeing an unusual increase in investor interest.

Watch this video for a "...

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.

Messy For Longer

Many of the strongest areas for global equity markets are failing to hold their breakouts, or simply reversing at logical levels of overhead supply. The Global Dow is a pretty well-rounded representation of the world stock market. As you can see in the chart, buyers couldn’t get it done for the third time this year. Sellers are back in control for now, and with prices back in their former range, there is no directional edge over the near term. Our bias is neutral, and we’re expecting further sideways action. If and when prices reclaim those year-to-date highs, we want to be long. This is simply the case for most stocks right now.

JC and I traveled to India together a couple years back to meet with Indian prop and options traders and to lead discussions at a few events. It was an amazing experience to be able to view risk through the eyes of traders that come from very different backgrounds than our own.

It should go without saying that we indulged (perhaps overindulged?) in the local cuisine. To be honest, we ate like Kings and it was wonderful. Everything we ate was fantastic and I want to go back as soon as possible. It was such a great time with great people.

So, when perusing the latest crop of new ideas cranked out by ASC team, one name with an Indian flavor caught my attention.

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:

• This week, our macro universe was in the red as 81% of our list closed lower with a median return of -2.28%.
• The Volatility Index $VIX was a massive winner, closing out the week with more than a 59% gain.
• The biggest loser again was Oil $CL, with a massive weekly loss of -10.45%.
• There was a 13% drop in the percentage of assets on our list within 5% of their 52-week highs – currently at 49%.
• 62% of our list made...

Bitcoin has been dragged down by legacy market volatility, even as investors continue a strong regime of buying.

The crypto market isn't fully out of the woods as far as volatility is concerned, and there are risks to be mindful of in the coming days and weeks.

But the picture remains positive for Bitcoin and the overall crypto landscape through the end of the year and into 2022.

Everyone saw it.

Everyone was talking about it.

It was the day Small-caps finally broke out of their almost year-long base.

This was finally it!

But then last week we learned that it wasn't.

Here's what that failed breakout looks like.

This week we’re looking at a long setup in the Services sector. While there is weakness in the market, we're observing pockets of strength as well.

Let's take a look at what we have today!