As long as the pattern in today's trade holds up high, then we can profit in today's trade.
If it follows through on the upside, all the better and we'll achieve our profit target all the sooner. But as long as it doesn't falter, that's all we need to profit.
Either way, we're leveraging what the options market is offering us to increase our odds of success.
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.
I've learned a lot of lessons over many years in the market and I've got war stories for days.
But with what we do today, I just like to cut right to the chase. I'm going to share my worst defeats and hardest lessons so you can learn from them, just like I did, and hopefully sooner.,
We all have to learn one way or another.
Today we're talking about the most important companies in America. But what exactly does that mean? Most important?
It's so open ended and subjective.
When I was a lot younger, call it 15-18 years ago, I hadn't learned to recognize the sum of the parts of the market. It hadn't hit me yet that it's a market of stocks. It's not just a "stock market".
This really set me back at the time. I was being too narrow minded and focused on what the media was pointing me to. I wasn't running those numbers myself deciding what actually mattered and what was just noise.
And when I finally understood that it takes stocks going up in prices to drive the indexes higher, I started to pay more attention to the prices of those stocks.
It's been a historic bull market for stocks - One of the best periods to own equities in American history. I hope you participated along with us.
But believe it or not, the U.S. was not the biggest winner. There are other parts of the world that have actually outperformed U.S. equities - both the S&P500 and the Nasdaq100 returns.
Look at the Tel Aviv 125 Index, for example, breaking out of this multi-year base to new all-time highs:
You may have heard by now. The so called, "Buffett Indicator" is flashing what we're being told are "warning signals" of an imminent market collapse.
It is the "Buffett Indicator" after all. And Warren Buffett is one of the all-time greats.
But let me fill you in on a little secret. The only people who actually care about this ridiculous excuse for a "market gauge" are journalists writing their glorified gossip columns and charlatans trying to do their best to scare you.
That's it.
They claim that the "Buffett Indicator" is this magical signal based on a ratio between the total market-cap of U.S. stocks relative to U.S. GDP.
It's so hilarious that even Charlie Munger came out and said that,"Just because Warren thought of something 20 years ago doesn't make it a law of nature. There is no natural correlation between GDP & Corporate Profits"
The "Buffett Indicator" is not a thing. Not even the guy who it's named after thinks it's relevant.
Crude oil is setting up for a big move, and almost nobody is paying attention. In fact, sentiment in the energy trade couldn’t be more bearish right now. Everyone hates it, everyone.
As Strazza said on our call yesterday, “Even Warren Buffett is losing money on this one.” That’s the vibe.
XLE keeps dropping, the bearish sentiment intensifies, yet producers are stepping in and buying. That’s a bullish signal if I’ve ever seen one.
During this time of the year, I find myself thinking back on the prior 12 months. It's hard not to right?
I wanted to send a short note today reminding everyone to look around. Understand what is happening out there and why it's been happening.
This year more than ever, we are grateful for the permabears, who are so darn good at convincing all those gullible sheep to fight a perfectly good bull market, that it's helped the rest of us make so much more money.
The S&P500 is up 28% this year. The Nasdaq100 is up 30%. This is after the 2023 returns of 26% for the S&P500 and 54% for the Nasdaq100.
They cried and cried about a recession. But all we got was the Nasdaq literally doubling in total value.
These are historic returns that have rarely ever been seen in American history.
But I have to say, if it wasn't for these angry permabears promising you a crisis every day the past 2+ years, our returns would not have been as good.
If Wall Street sell side analysts weren't so bad at their jobs, these gains would likely not be anywhere near what they've been.
Last month the S&P500 and Nasdaq100 both closed at the highest levels in history. December is now on pace for another new all-time monthly closing high, for the 10th time this cycle.
The trend here for stocks is NOT down.
This is a bull market. And sector rotation continues to drive it higher.
We discussed this all and what we're looking for come the new year during our LIVE Video Conference Call this week.
Welcome to TheJunior International Hall of Famers.
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-listed international stocks, or ADRs.
This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.
Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
Let’s dive right in and check out what these future big boys are up to.
This is our Junior International Hall of Famers list:
