This week, the US Dollar/Rupee pair hit our upside objective and evidence suggests a near-term pullback is likely.

In this post, we'll update our risk management levels and outline why the Rupee remains at risk longer-term.

From the desk of Steve Strazza @Sstrazza

In a post earlier this month, we scanned the S&P 500 for the strongest uptrends so that we'd be prepared to buy stocks when the market stabilized. Well three weeks and an additional 25% drawdown later, and we're going to do a similar exercise.

The last two days' rally in stocks confirmed bullish breadth divergences which suggest a tradeable bottom is near and put the S&P 500 back above its 2018 lows around 2350, giving us a well-defined level to manage risk against. If prices fail to hold this level, all bets are off, but as long as we're above it, we think the bias is to the upside over the coming weeks to months. As such, we're looking for long opportunities that offer asymmetric risk/reward setups in the strongest stocks, three of which we outline below.

From the desk of Steve Strazza @Sstrazza

We are constantly analyzing market breadth. We do this not just for insight into the strength of the current trend but also because it helps us identify key turning points. We outlined a variety of deteriorating breadth measures in a post last month to support our bearish outlook on stocks, and the signal turned out to be quite timely as the market collapsed soon after.

With the market now severely oversold amid one of the swiftest bear markets in history, we're looking to breadth measures once again for signs of a tradeable low.

This week we've outlined what we need to see from breadth, the Nifty 50 & Bank Index, and Copper in order to get long Indian stocks from any sort of intermediate or long-term perspective.

Although we've not seen those developments yet, US Stocks (S&P 500) is back above its December lows and other foreign indexes have started to catch a bid in the near-term. This subtle improvement is suggesting some trade opportunities could develop on the long side for those who hold positions for a few days to a week or two.

A Bullish Trade? Is Sean crazy?

Believe it or not, there are stocks holding up "well" in this tape. "Well" is obviously a relative term.

JC published a bullish piece on Docusign $DOCU this week that speaks to me and I'm going to leverage this insane volatility into an options trade.

From the desk of Tom Bruni @BruniCharting

As we look for signs of a tradeable low in Equities, we're not only looking at breadth and the stock market's leaders, we're also looking to the Commodity market for a signal of what's to come.

Let's get into why Copper needs to be on your radar.

As we look for signs of a tradeable low in Equities, we're not only looking at breadth and the stock market's leaders, we're also looking to the Commodity market for a signal of what's to come.

Let's get into why Copper needs to be on your radar.

From the desk of Steve Strazza @Sstrazza

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

Do you see how stocks are making new lows? That's a characteristic of downtrends, not uptrends. We first want to identify what type of market environment we're in, and then decide which tools we're going to use to help us profit and manage risk.

Something interesting about the current market is that a lot of stocks are making new lows. Most stocks are. But there are a select few that decided they were going to make new highs instead. We call that Relative Strength. You sometimes hear people say how they're "Bucking the trend". This is that.

Our upside target in Zoom Video $ZM was hit today. That was a quick 40% gain. One for the good guys!

But which one is next? I think it's Docusign $DOCU. The stock is ripping to all-time highs relative to S&Ps and prices have been consolidating nicely. I think the next move is higher. 

If you're worried, scared, uncertain, unhappy, on tilt --- or all of the above, depending on the hour -- it's ok to do nothing.

Cash is a position.

Cash is comfort. Cash is control. Cash is Safety.

In our last post, we looked at the implications of the Nifty 500's breadth and momentum divergences.

In this post, we're outlining the three charts we're watching this week to help determine risk appetite for stocks.