That’s right. We’re thirsty.
And how can we not be when looking at this Pepsi chart?
With everything the stock market has thrown at us over the past few weeks, look how well Pepsi $PEP has held up!
Expert technical analysis of financial markets by JC Parets
That’s right. We’re thirsty.
And how can we not be when looking at this Pepsi chart?
With everything the stock market has thrown at us over the past few weeks, look how well Pepsi $PEP has held up!
From the desk of Steve Strazza @Sstrazza
Welcome to the 2 to 100 Club.
As many of you know, something we’ve been working on internally is using 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 Louis Sykes
From the Desk of Louis Sykes
As a teenager, I was deep into science.
It wasn’t until the last year of high school that I made the last-minute decision to study finance at university. For the longest time, I was preparing to study mathematics, astronomy, and physics.
The universal disciplines of science I learned in this period will always stick with me as an aspiring trader.
One discipline is the Feynman Technique, a foundational mental model you can use to unlock growth in your career, startup, business, writing, and life.
by Ian Culley
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
Earlier in the month, we pointed out breadth deterioration in the US dollar.
While the dollar pressed to new highs against the yen, the pound, and the euro, it struggled to gain ground against commodity-centric and emerging market currencies.
The lack of broad strength had us questioning the validity of the recent rally in the US Dollar Index $DXY.
That’s changed recently.
Today, the dollar index is catching to new highs against a backdrop of broadening strength, not weakness. Now that we’re seeing dollar internals flip and start to confirm these new highs from the index, this is not a trend we want to fight.
And, to be clear, we haven’t been.
While we’ve been skeptical of the rally in the DXY, we’ve expressed a bullish view on the dollar via the major crosses. They’ve been the weakest links and main drivers of DXY strength.
And now that we’re seeing dollar strength expand, we have more options to express a bullish thesis.
Let’s talk about one of those now.
by JC
With the S&P500, Dow Jones Industrial Average, Nasdaq 100 and Global 100 Indexes down in recent weeks, the Dow Jones Transportation Average has been up each of the past 2 weeks.
And Transports started out this week positive once again: [Read more…]
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.
Then we flip through our list of stocks flashing unusual activity and pick the best setups using many of the same technical filters we do for our other scans.
And, just like that, we’ll follow the money flow and fatten our own pockets along with some of the world’s most powerful financial institutions.
Can everybody just chill out a little bit?
The frenetic trading activity that defined the end of last week appears to be continuing into today. And we’re seeing VIX north of 30. If I liked selling premium last week, I should love it today, right?
Well, it just so happens we’ve got an ETF with pricing in June options that is giving us a lot of wiggle room to sell premium into. So we’re going to do just that, betting on consumers to chill.
by JC
Are you seeing this?
Inflation Protected Treasuries are outpacing nominal yielding Treasury Bonds. We’re now at the highest levels since the Great Financial Crisis.
For those new to fixed income, this is the bond market expressing its thoughts about inflation. [Read more…]