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Freshly Squeezed (08-13-2024)

August 13, 2024

From the Desk of Steve Strazza @Sstrazza

Stocks with high short interest are proving resilient, even in challenging market conditions, as the bears struggle to drive down even the most hated names.

With this in mind, it's time for another Freshly Squeezed report.

Here's our approach:

We find the most heavily shorted stocks in the market. Then, we monitor these names for signs of upward momentum. Once that momentum kicks in, we ride them higher as the bears get squeezed.

We got fresh short data on Friday, so let's dive in and talk about it.

Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions.

When a stock is shorted, it means incremental buyers are waiting in the wings to close out their bearish bets.

We love this, as new buyers are the one true catalyst for higher prices.

When shorts are proven wrong, they become buyers of the stock. In many cases, this happens as momentum flows into these names and fuels massive short-covering rallies.

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Gold Mining Stocks Rip to New Highs

August 12, 2024

From the Desk of Ian Culley @IanCulley

Don’t believe the headlines.

It’s not all doom and gloom for the market.

Plenty of assets are trending higher, mainly those related to precious metals.

Gold is challenging all-time highs. Silver is catching a bid. Palladium is digging in at former support. (So much for those seven-year lows.)

And gold and silver mining stocks are ripping…

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The Minor Leaguers (08-12-2024)

August 12, 2024

From the Desk of Steve Strazza @Sstrazza

Welcome to The Minor Leaguers.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

Nowadays, to make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

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Gold Mining Stocks Rip to New Highs

August 12, 2024

From the Desk of Ian Culley @IanCulley

Don’t believe the headlines.

It’s not all doom and gloom for the market.

Plenty of assets are trending higher, mainly those related to precious metals.

Gold is challenging all-time highs. Silver is catching a bid. Palladium is digging in at former support. (So much for those seven-year lows.)

And gold and silver mining stocks are ripping…

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The Dust Has Settled. What’s Next for Bonds?

August 11, 2024

From the Desk of Ian Culley @IanCulley

Here’s what happened last week...

A few bad actors used open profits from highly leveraged positions to purchase other assets.

When those highly leveraged positions turned against them – ripping their faces off – margin calls went unanswered, leading to a lack of liquidity.

Bonds ripped, stocks dipped, and credit spreads blew out. 

Now that the dust is settling, let’s review a few takeaways from last week’s volatility and consider what may lie ahead.

Credit Spreads Had it Right

Bonds hinted at a stock market correction months ago as widening credit spreads failed to confirm new all-time highs.  

The increasing stress on credit markets culminated in the High-Yield $HYG versus US Treasuries $IEI ratio blowing out to its lowest 14-day RSI reading since September 2008:

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Bonds Rallying? Buy Real Estate (08-10-2024)

August 10, 2024

From the Desk of Steve Strazza @Sstrazza

Have you heard about the rally in the bond market?

After a severe multi-year drawdown, bonds have carved out a massive basing pattern and are putting the finishing touches on a primary trend reversal.

More importantly, interest rate-sensitive stocks are following suit and rallying higher as rates come down.

The sector with the highest correlation to bonds, Real Estate, is also putting the finishing touches on a bearish-to-bullish reversal.

With the market under pressure in recent weeks, Real Estate's relative strength and resilience stands out in a big way.

This once left-for-dead group of stocks is now the sector leader over the trailing month and quarter.

The only responsible thing for us to do is dive beneath the surface and find the strongest individual names to use as vehicles to play this trend.

Before we do that, let's set the stage.

Here is a look at those multi-year bases in bonds and real estate. Notice how they look the same:

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Energy Finds Support as Commodities Sag

August 9, 2024

From the Desk of Ian Culley @IanCulley

Stocks aren’t the only risk assets falling this week.

Rebar, Corn, and Cotton are posting multi-year lows. Dr.Copper is slipping below four bucks. And our short cattle trades are working.  

But as most commodities slide, one area (aside from precious metals) is finding its feet.

Notice the CRB Index is carving out a two-year base while our equal-weight index hits its lowest level since early 2021:

The disparity between the two indexes comes down to their construction. 

We weigh 33 commodities equally for our index, so rebar futures carry the same weight as crude oil. 

On the other hand, crude comprises almost a quarter of the CRB Index.

These stark contrasts reveal two pertinent themes: broadening weakness among commodities and emerging relative strength from energy.

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Energy Finds Support as Commodities Sag

August 9, 2024

Stocks aren’t the only risk assets falling this week.

Rebar, Corn, and Cotton are posting multi-year lows. Dr.Copper is slipping below four bucks. And our short cattle trades are working.  

But as most commodities slide, one area (aside from precious metals) is finding its feet.

 

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The Hall of Famers (08-09-2024)

August 9, 2024

From the Desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as ServiceNow, Palantir, and MercadoLibre.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

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Junior Hall of Famers (08-09-2024)

August 9, 2024

From the Desk of Steve Strazza @Sstrazza

We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.

However, when it comes to this one, it couldn't be any simpler!

With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.

Welcome to The Junior Hall of Famers.

This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.