This is a bonus, second trade idea for today that came out of our internal conference call this morning and dovetails nicely with this note that JC just published.
We’re getting short Lululemon, $LULU due to what appears to be a failed breakout:
Expert technical analysis of financial markets by JC Parets
This is a bonus, second trade idea for today that came out of our internal conference call this morning and dovetails nicely with this note that JC just published.
We’re getting short Lululemon, $LULU due to what appears to be a failed breakout:
by JC
I really like the risk vs reward from the short side here.
The divergences and rotation into defensives are finally there.
The Dollar has been strong throughout all of January.
That was the first heads up.
The new highs list peaked in mid-December on both the NYSE and Nasdaq.
So you can argue that we’ve been in a correction already, and that’s it’s just about to get worse.
And then here’s what really did it for me.
It’s the rotation into defensives that is the make or break for this bearish approach to the market: [Read more…]
It doesn’t happen very often that a bearish setup presents an opportunity for us to position with a simple long puts purchase. Usually, when we want to buy puts, the whole world is on to the idea and the premiums in the options market reflect that.
But today, we’ve got a situation where a stock is flirting with breaking a key support level, and the options market is pricing in a smaller move than our research suggests is possible.
[Read more…]
by JC
When you wake up knowing that you have a fresh batch of Monthly Candlesticks waiting for you at the end of the day, it’s a great feeling.
Enjoy it.
But I believe it also helps to be grateful.
I think you have to be.
Just think about all of the less fortunate investors around the world who don’t get to appreciate such a feeling.
In some cases, it’s just because they’re lazy and don’t feel like doing the work. It does take all of 15 minutes.
But in most cases, they don’t even know.
They have no idea how much information and perspective their losing out on.
It’s a great arbitrage that I’m happy to celebrate with all of you every month.
This is the cheat code! [Read more…]
by Ian Culley
From the Desk of Ian Culley @IanCulley
The entire marketplace is fixated on tomorrow’s FOMC meeting.
Will the Fed make its first rate cut in March, or will it be in June?
Who knows.
I enjoy speculating as much as the next guy, but I’m not into guessing on next moves by central bankers.
I prefer to track another market participant with a Ph.D. in economics, Dr. Copper.
And we can’t discuss copper without including the Australian dollar!
by JC
I understand that some people are lazy and don’t like to count.
I get that.
Also, journalists are NOT in the business of telling you the truth. The truth is just a commodity at this point, and that’s no longer a secret. Word’s gotten out. So it’s either gross sensationalism or false information to get you to consume their content.
And then, of course, you have your standard charlatans who need to cherry pick data and manipulate anchor points so that they don’t look as foolish for missing this entire bull market.
So what ends up happening is that if you’re told something enough times, and you haven’t actually done the work, you start to believe it.
“It’s only Tech stocks that are driving this market”
Sound familiar?
But for those of you who actually take the time to look, you know it obviously isn’t true. [Read more…]
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.
by Ian Culley
From the Desk of Ian Culley @IanCulley
Precious metal charts aren’t painting a bullish picture for investors.
Silver is underperforming gold. The Gold Miners ETF $GDX is posting new all-time lows versus the broader market. And everywhere you look, individual gold mining stocks are breaking down.
Well, not all mining stocks. One chart continues to fly high…