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 small-cap-focused column since we launched it late last year and started 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. There are also price and liquidity filters. Then, we simply sort by proximity to new highs in order to focus on the best players.

The goal is to catch the strongest names while they’re small and still have serious upside potential. If any of these stocks ever climbs the ranks to the big leagues, the returns could be huge. We’re looking at 5-10x moves just to break into large-cap land!

Let’s dive into this week’s report and see what’s happening in some of the hottest stocks in the Minor Leagues.

While the primary uptrend is still intact for small caps,...

The All Star Charts team is once again focused on financials, recently publishing a bullish piece on banks all around the world.

We've already got some exposure on the books in the financials sector, but with participation broadening, there are additional opportunities to participate.

And one opportunity in particular offers an opportunity to really leverage into a big win if we get it right.

This week we're looking at a long idea in the IT space.

Let's take a look at this name.

Cardano was the talk of the town last week.

Even though our initial target of 2.20 was hit within a matter of days, let's not underestimate the implications of this base:

With a breakout of this magnitude, this thing could be at $10 in no time.

It's no joke.

But it's not just Cardano showing incredible leadership right now.

If you're solely focused on Ethereum and Bitcoin, you're not seeing the whole picture.

We retired our "Five Bull Market Barometers" in mid-July last year 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.

"Technician" vs "Chartist"

These are two terms that are often used interchangeably: Technician and Chartist. But many times it’s wrong to do so. You see, all chartists are technicians by definition, but not all technicians are chartists.

What is a chart?

For me, a chart is just a visual representation of the changes in equilibrium between supply and demand.

That's all it is.

We don't have to pretend it's something that it's not.

How the chartist interprets the data on the charts is where the skill and experience comes in. The chart alone won't do much for you, in the same way that a carpenter is way better at using his tools than I could ever be.

What is Technical Analysis?

These are the registration details for our live monthly conference call for Premium Members of All Star Charts.

This month’s Conference Call will be held on Monday August 16th at 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday night:

It's Saturday Morning Chartoons time. 

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.

We came into last week wondering if we'd get follow through from Bank stocks.

I think we can all agree that we did. And not just in the U.S. but around the world.

Here are Regional Banks above those key 2018 highs:

There are few things as bullish as Regional Bank stocks acting well.

We went over all things Financials including new long positions in yesterday's note.

These look like uptrends to me:

How bad could things be if these European Banks are above key support?

...

You guys know that I use Fibonacci levels to help us identify targets and manage risk.

And you've all seen it work, with your own eyes, for many years. I have too, of course, as one of the gang here calculating these levels every day.

But I've never quite understood WHY it works. How come these numbers keep showing up all over Nature. Why do the prices of stocks and other assets keep respecting these levels?

When I get asked, I don't have an answer.

But if there's anyone I'm going to ask, it's gonna be Bart. So that's what I did.

And figured why not share this with all of you?

This was a lot of fun!

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

Rotation is the lifeblood of any bull market.

If a sustained uptrend is going to persist, then we need to have broadening participation... or at least some healthy rotation.

And that’s exactly what we're seeing within commodities right now. 

As the energy group chops sideways and base metals hang tough, we’re starting to see signs of strength from one of the worst-performing areas over the past year.

Softs.

Like livestock last week, it appears this group of commodities are ready to play catch-up as they turn the corner and head higher. 

Considering the fact that other groups are simply consolidating or correcting through time instead of price, we'd argue that this looks more like an expansion in participation rather than rotation. But it's really just semantics. It's all bullish at the end of the...

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

In today's post, we’ll discuss some of our favorite and most important intermarket ratios and see what they’re suggesting for markets and risk appetite around the globe.

One thing we found interesting when digging through these charts is that many of them look a lot like stocks do right now. 

Sideways. Range-bound. Messy. But, within the context of underlying uptrends.

So these are basically just continuation patterns on shorter timeframes.

But, after consolidating for months and even quarters now, we are beginning to see some resolve higher… kind of like we’re seeing from stocks on an absolute basis.

Coincidence? Probably not.

We think this makes a lot of sense and bodes well for risk assets. Let’s take a look at some of these charts now.

Here’s one of the most important cross-asset ratios we track, and it’s a great example of exactly what we’re talking about. 

This is the stocks-versus-bonds ratio $SPY/$TLT:

...

From the desk of Willie Delwiche.

Consumer Sentiment for August was expected to be little changed from where it was in July (81.2). The actual data (based on responses collected over the first half of the month) showed consumer sentiment undercutting last year’s lows and dropping to its lowest in nearly a decade. While consumers’ assessment of current conditions moved lower in August, the collapse in the overall sentiment index was really fueled by more dour expectations about the road ahead. Consumer expectations indexes are considered leading indicators for the economy overall and the August collapse may point to increased economic headwinds as we head toward the end of the year.