Regardless of our feelings about the man behind the phenomenon, putting that all aside, there is a potentially great trade setting up in this Trump Media & Technology Group $DJT.
I’ll skip the preamble and get right to it. [Read more…]
Expert technical analysis of financial markets by JC Parets
Regardless of our feelings about the man behind the phenomenon, putting that all aside, there is a potentially great trade setting up in this Trump Media & Technology Group $DJT.
I’ll skip the preamble and get right to it. [Read more…]
by JC
How’s this messy market treating you?
Are you happy the market is a mess? Or do you find it frustrating?
Keep in mind, the S&P500 is still at the same price it was 2 months ago.
Both the Nasdaq100 and Dow Jones Industrial Average are still at the same prices they were back in February.
We’re almost half way through May.
The Technology Index, which is the largest component of the S&P500 (30%) and has the largest weighting in the Nasdaq100 (50%), is still where it was back in January.
Again we’re half way through May!
Meanwhile, don’t forget about the Small-cap Russell2000 that’s hilariously still stuck below where it was way back in December.
The Consumer Discretionary Index and Dow Jones Transportation Average are also down for the year.
That’s the market we’re in.
Some people keep pretending that this year is just like last year.
But I cheated. I actually looked at the data. So I know better. [Read more…]
From the Desk of Steve Strazza @Sstrazza
Welcome to The 2 to 100 Club.
As most of you know, we use various bottom-up tools and scans to complement our top-down approach.
It’s really been working for us!
One way we’re doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn’t just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.
When you look at the stocks in our table, you’ll notice we’re only focused on Technology and Growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.
Then, like any good technician, we filter the list down to those closest to new highs.
This allows the cream of these strong groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
by Ian Culley
From the Desk of Ian Culley @IanCulley
Buyers are coming to the dollar’s rescue following last week’s drop.
But I’m still bearish.
Of course, none of that matters if the US Dollar Index $DXY continues to rally and these trade setups fail to trigger entry signals.
by JC
Here are the returns of a series of country ETFs since October.
Notice how the ones from the U.S. are further down the list than you might expect.
At the top you’ve got Argentina, Peru, Colombia and Mexico: [Read more…]
An All Star Options member recently asked me to explain what “short interest” meant.
This is a hot topic at the moment because there have been a few setups I’ve entered trades into recently, precisely because short interest levels are high.
So what is “short interest”?
According to chatGPT:
Short interest refers to the total number of shares of a particular stock that have been sold short by investors but have not yet been covered or closed out. When investors sell short, they borrow shares of a stock from a broker and sell them with the expectation that the stock’s price will decrease. They then plan to buy back the shares at a lower price, return them to the broker, and pocket the difference as profit.
Short interest is typically expressed as a percentage of the total number of shares outstanding for a given stock. It is an important metric for traders and investors because it can provide insight into market sentiment. High short interest may indicate bearish sentiment, as it suggests that many investors are betting on the stock’s price to decline. Conversely, low short interest may suggest bullish sentiment, as there are fewer investors expecting the stock’s price to fall.
Traders often monitor short interest levels as part of their analysis when making trading decisions. High short interest can also lead to a short squeeze, where a sharp increase in the stock’s price forces short sellers to buy back shares to cover their positions, further driving up the price.
I added the bold at the end, because that’s the piece that matters to me. When a stock is printing new relative highs (relative to where it’s been over the past several months, at least), and a lot of people are holding short positions — all of those traders are losing money. Every tick higher increases their losses. The only way to end the pain is to buy stock. [Read more…]
No setup gets me more excited than buying a fresh new all-time high.
There are no bagholders looking to unload their losing position to breakeven. Every investor or trader holding a long position is making money. And every trader holding a short position is losing money and the only way they correct that sad state of affairs is to buy stock to stop their losses.
In other words, blue skies above.
This doesn’t guarantee success on a long trade here, of course. But these are the types of trades that commonly lead to my biggest gains.
Here’s a weekly chart of semiconductor name Analog Devices $ADI: [Read more…]
by JC
The Small-cap Indexes in America have had a tough time for a while now.
Since the start of 2022, both of these Small-cap Indexes have actually produced a negative return.
The S&P600 Small-cap Index requires companies to have a track record of earnings in order to be included in the index.
The Russell2000 lets anyone in. It doesn’t matter how much money you lose, if your market cap is above $300 Million, then you’re in.
Both of them have been terrible.