From the desk of Steve Strazza @Sstrazza

Cryptocurrencies are just more stocks.

In the stock market, we have software, internet, homebuilders, and gold miners. The powers at be do their best to classify all the publicly listed companies into industry groups. This allows us to break them into various baskets and analyze them at the index level.

In crypto markets, there are tokens focused on decentralized finance, the metaverse, smart contracts, and more. But unlike the stock market, the crypto asset class is still in its infancy. As such, there is no industry standard for how to group these different tokens based on what they do.

In our analysis, we'll often discuss what some of these tokens do. We use some indexes that are offered from data providers, as well as create custom indexes of our own as we see fit.

The reason we do this is for information. Aggregating tokens into groups and analyzing them as a whole allows us to glean insights about the strength or weakness of different areas of the crypto market.

One such group that's...

We have a new Options trade up this week.

We're Selling Puts Naked!

More specifically, we're selling short $XBI January 105 Puts for approximately $2.25 per contract

Check out our short video with the thought process behind these trades:

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

Our next Live Call will be held on Monday December 13th 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:

Are you watching this?

We're seeing the fewest amount of bullish financial advisors since April of 2020, when things were as bad as it gets.

Now here we are just a few pennies from new all-time highs in the S&P500, and the bulls are in full retreat.

Panic mode has set in:

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

The recent risk-off action came to a head last week, with commodities, stocks, and interest rates all violating key support levels. 

We saw a brief flight to safety, as long-term treasury bonds $TLT broke out to their highest level since early January.

Yes, money was flowing into bonds, which is not a good look for stocks and commodities.

Bottom line, there was a lot of damage done to the primary uptrend in a very short time. Market participants needed to come out and repair the damage ASAP.

In the handful of trading sessions since the selling stopped, bulls have managed to claw back much of the losses from last week.

Buyers needed to quickly step up to the plate. And that’s exactly what we’re seeing right now, as stocks and other risk assets are rebounding aggressively off the recent lows.

As for bonds, the breakout in TLT failed, and the 10-year and 30-year both snapped back above critical levels.

The bond market has been sending some strong signals lately for those who are listening. Let’s check in on some...

What a difference a couple of days makes!

The froth has definitely come off the $VIX spike over the past week. Does this mean we're all clear? Well, no. Not necessarily and not yet.

But it does give us a little bit of confidence that some short-term lows can be leaned against as good risk management levels when taking long directional bets.

There's still some juicy premium to be sold when looking at some sector ETFs and that brings me to the Biotech sector ETF $XBI.

I had a nice chat this week with Aaron Task and Stephen Alpher over at Seeking Alpha.

We talked about why price matters most and how come media outlets choose to ignore it in favor of other things.

What's going on with US Stocks, Interest Rates, Crypto and which stocks are we buying?

We go over all of this and much more throughout our conversation.

This was a lot of fun. Check it out.

No matter which markets you're investing in, this is a good lesson.

The visual below comes from this Yesterday's Crypto Note. It shows the different scenarios that almost all cyrpto currencies currently find themselves in.

Most are below their former highs, and stuck in a range once again. You can put US Small-caps in that exact same category too, for example.

Homebuilders and Semiconductors look like the one on the left. You can put $LUNA $MANA $SAND $CRO and even $ETH in that category.

And then you can find a lot of nasty Cryptos that look like the one on the right. You can probably put the ARK Funds, Biotechs and China in that bucket too:

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

Last week, we pointed out that commodity-centric currencies were beginning to slide. 

Our petrocurrency index was making new 52-week lows, and the Australian dollar was on the verge of breaking down. By Friday’s close, the AUD/USD cross looked to have completed a topping pattern and was trading at its lowest level since the summer of 2020.

Seeing one of the world’s leading commodity currencies break down from a major distribution pattern would not bode well for commodities and other risk assets.

But the bulls aren't ready to roll over yet. Investors are back on offense this week, as buyers have already repaired all or most of the damage that was done to stocks and commodities last week.

They needed to come out swinging after the latest flurry of selling pressure… And that’s exactly what they did! 

We're also seeing very strong bounces in risk-on currencies like the Canadian dollar and the Australian dollar. What started out as a nasty resolution lower in the Aussie has...

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 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 bottom-up scan, “Under The Hood.”

We recently decided to expand our universe to include some mid-caps…

For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but it’s time we branch out a bit and allow some new stocks to find their way onto our list.

The way we’re doing this is simple…

To make the cut for our new Minor Leaguers list, a company must have a market cap between $1 and $4B. And it doesn’t have to be a Russell component–it can be any US-listed equity. With participation expanding around the globe, we want all those...

It's an ongoing joke among many of us because we oftentimes catch ourselves thinking, and saying, that the upcoming week will be a big one.

"We'll get a lot more information this week" - is said at the beginning of every week.

Start noticing. You'll see.

But seriously, can we all agree that THIS particular week is extra important?