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…]
Expert technical analysis of financial markets by JC Parets
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.
by Ian Culley
From the Desk of Ian Culley @IanCulley
Stock market bulls are scooping and scoring as the Nasdaq Composite, the S&P 500, and the Dow Jones Industrial Average all show green.
Stocks and rocks should benefit on the heels of renewed rate-cut hopes.
Today, I’ll outline a name that checks both boxes.
Spoiler alert: It’s a prime candidate for a short squeeze…
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.
To make the cut for our Minor Leaguers list now, 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 ADRs in our universe.
The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to focus on the best players.
The goal is to catch the strongest names while they’re small and have serious upside potential. If any of these stocks ever climb the ranks to the big leagues, the returns could be huge.
We’re looking at up to 10x moves just to break into large-cap land!
Let’s dive into this week’s report and see what’s happening in some of the hottest stocks in the Minor Leagues.
Today’s trade is in a name that currently sports a 15% short interest which equates to approximately 7 days to cover. This could be significant fuel for a blast off if the current post-earnings momentum propels this stock above 52-week highs.
The countdown to launch is ticking, so lets get involved. [Read more…]
by JC
It’s amazing what price action can do to change sentiment.
We went from frothy optimism just a couple of months ago, to a much more pessimistic environment for investors.
This table below is a great summary of the different gauges we look at to measure sentiment and what they’ve done over the past month.
The blue diamonds are the current readings and the gray triangles represent where these were a month ago. [Read more…]