The market has a mind of its own. Who would've thought that Reliance Industries would break out on a messy market day?

If you've been in the market a while, then you know that Reliance can single-handedly decide the direction of the market. Such is the power of this stock!

So what do we have here? Well, after a considerable bounce over the past month and a half, Reliance has managed to breach an area of resistance. And we're here to talk about the implications of that.

From the desk of Willie Delwiche.

Key Takeaway: Index level highs lack support beneath the surface. Bonds rally in the wake of hot inflation data. Households own relatively few bonds, the Fed has never owned more Treasuries.

• Health Care moved up three spots in this week’s relative strength rankings, but has yet to crack the leadership group. Industrials sector continues to slip in terms of relative strength.
• Both our sector and industry group relative strength studies show Energy and Real Estate as areas of emerging leadership across the size spectrum.
• With Consumer Staples and Utilities still near the bottom of the rankings, it’s hard to make the case for a decisive shift toward defensive leadership in the equity markets.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest "Under The Hood” column for the week ended June 13, 2021. This report is published bi-weekly and rotated on-and-off 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 "behind the scenes" look at our process.

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

The latest Young Aristocrats report is out and as always, there are some great opportunities setting up there. These are stocks with tremendous dividend growth consistency that are also setting up for bullish price action. How can investors not love these setups? Win from the price appreciation, and get paid while you wait in the form of dividends. Yes, please!

The opportunity that best caught my attention today is an all-time high breakout in a niche corner of the market.

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.

Macro Universe:

• Our Macro Universe was mixed this week as only 51% of our list closed higher with a median return of 0.05%.
• Small-Caps was the strongest, closing out the week with a 1.89% gain and a fresh 4-week high.
• The biggest loser of the week was the Lumber losing a massive 17%
• US indices like the S&P 500, Russell 3000 & Russell 1000 closed the week out at...

From the desk of Steve Strazza @Sstrazza

Our Top 10 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.

Outlook For Yields Turns Lower

Despite a historic CPI print, yields are unanimously pointing lower, including other vital metrics from different asset classes. Both the Copper/Gold and Regional Bank/REIT ratios have been pointing down for some time, and the all-important High Yield/Treasury Bond spread is shifting to a more bearish tilt for risk assets. It’s pretty clear right now that either the Bond market disagrees that long-term inflation is here to stick around or disagrees with the stock and commodity market on how it’ll affect.

This is where a lot of our mixed signals are coming from right now. Risk assets and commodities, particularly Crude Oil, are pointing to further upside for risk, while the Bond market is beginning to raise some alarm bells. And if we know anything about the Bond market, we consider it smart money. Watch this space...

...

Altcoins are NOT leading this recent bounce.

If (and this is a big if) this is a tradable low for the Cryptocurrency space, this is a critical time and place for us to see new leadership emerge. So far, it's certainly not coming from down the cap scale.

We shared this chart in one of last week's notes, mentioning that:

Throughout Bitcoin’s rebound in the previous few days, the leadership has not been in the Altcoins.

Apart from a few exceptions, most Altcoins have been flat since Bitcoin’s recovered from its crash lows.

Nearly a week since and the same still holds true:

This week we're looking for a long setup in the Pharmaceutical sector. Historical highs are being clocked on both index and stock levels, and one name pops right up.

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

It's Saturday Morning Chartoons time. You can read more about the reasoning behind this post here. 

We're just interested in aggregating all of the charts we put together throughout the week and organizing them all into one, easy to flip through deck.

One thing that stood out to me this week is the lack of deterioration underneath the surface.

We're just not getting an expansion in new lows.

Fewer new highs? Yes definitely. For a while now.

But more new lows? 

Not broadly speaking yet, no.

For the indexes to go lower, you need more and more stocks going lower. It's just math. 

And even if you look at short-term new lows, we're not seeing expansion yet either:

So for me, that's what I'm watching.

Is the market vulnerable for a correction? Yes.

But without an expansion in new lows, it's...

Early in February, we had published a post discussing the Adani Group and its targets as well as risk management levels. We published a follow-up post with revised targets and risk management levels in April this year.

Well, it's that time again where we update the levels and see what's in store for this group.

Here's to more rotations and revolutions in this particular solar system. Off we go on our rocket ship to see what the charts have to say!

We created a Custom index of Equally weighted Adani Group stocks. As you can see, this particular line chart only requires an extension in the headspace area. Keeps moving higher and higher.

Click on chart to enlarge view.

Now let’s take a look at individual stocks and where they stand at present.

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

Softs are an area of the commodity space that hasn’t received much attention over the past several months, and for good reason.

As the rest of the commodities complex has been on fire, the action from this group has been muted as they’ve underperformed their peers significantly since last year.

Besides Sugar reaching our initial objective last month and Coffee breaking out of a 4-year bottom, Softs have been a real snooze fest.

Cotton continues to chop within a broad range. Cocoa is well below overhead supply. And OJ grinds sideways as it builds a 3-year base.

But it looks like Orange Juice futures are poised to break free to the upside.

Let’s take a closer look at this favorable risk/reward opportunity in OJ and lay out a potential trade setup to get long this base breakout, if and when it comes...

Here’s the weekly chart of Orange Juice futures:

...