From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

We...

Today's trade is in a name that many American shoppers are familiar with.

You've probably seen TJ Maxx stores everywhere, frequently located in strip plazas throughout the suburbs. And there's a good chance your family has dropped some loot in there, taking advantage of the deals they are famous for.

JC commented today that he's invested in $TJX in his long-term account as a hedge for his wife's spending at this store. I think many of us can relate.

But what's got me most excited about this setup is the recent base just below $100, which would be an all-time high. Around here, we call that the hundred-dolla-roll, and it's one of my favorite setups:

In today's Daily Digest, we'll review:

1. New position in XLI.
2. No adjustments today.
3. No exits since the last report.
4. Current status of open campaigns.

Let's dig in!

From the Desk of Steve Strazza and Alfonso Depablos

The largest insider buy on today’s list comes in a 13G filing by Biotechnology Value Fund.

The investment partnership increased its stake in Kymera Therapeutics Inc $KYMR from 8.45% to 10%.

From the Desk of Alfonso Depablos @AlfCharts

When we talk about market bellwethers, we are referring to large-cap equities that indicate the broader market's future direction.

These stocks often have a heavy weighting in the most important sectors and indexes, as well as a notable economic impact due to their size and influence.

The world's largest bank and financial institution, JPMorgan Chase $JPM checks all these boxes and more.

For that reason, we treat JPM as an index itself. Basically, as JPMorgan goes, the market goes.

From the Desk of Ian Culley @IanCulley

Market participants are searching for a new narrative. 

Their uncertainty-fueled meandering is breeding US dollar strength. 

Will the Fed cut, or will they simply do nothing at the March meeting?

No one knows. 

But risk-on currencies have halted their recent advance. And luckily, we have price to light our way…

Check out the New Zealand dollar-US dollar pair (NZD/USD):

The New Zealand dollar is considered a “risk-on” currency as it tends to follow risk assets (global equities and commodities). Notice the NZD/USD rallied into the holidays off its October lows, much like US stocks. That’s not a coincidence.

But last month’s strength has quickly turned into this month’s weakness.

No wonder NZD/USD is sliding below a critical...

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

Breadth is expanding to a growing list of sectors and industry groups as the current bull market continues to broaden in scope and participation.

Naturally, this phenomenon is not limited to the US. We’re also seeing more and more countries and regions around the world join in on the party.

As the dominance from mega-cap growth fades, and cyclical and value stocks assume leadership roles, the stage is finally set for international outperformance.

In fact, despite how good US stocks were in 2023, they were not the best.

Today, we’re going to talk about Latin America. They were last year’s global leader, and we think the region is poised for more outperformance in the future.

First, with all the buzz about US stocks this past year, you’d think they were the leader. They weren’t.

Here is a 2023 performance chart of international indexes by region:

The iShares Latin America 40 ETF was up 33%, putting it ahead of the US and...

From the desk of Steve Strazza @Sstrazza

We held our January Monthly Strategy Session last week. Premium Members can access and rewatch it here.

Non-members can get a quick recap of the call simply by reading this post each month.

By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.

With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.

In today's Daily Digest, we'll review:

1. No new positions today.
2. Defensive adjustment in XBI.
3. Profitable exit in GLD.
4. Current status of open campaigns.

Let's dig in!

From the Desk of Steve Strazza and Alfonso Depablos

The largest insider buy on today’s list comes in a Form 4 filing by Timothy C. Wentworth, CEO of Walgreens Boots Alliance $WBA.

Wentworth reported a purchase of 10,000 WBA shares, equivalent to $242,220.

The NYSE new 52-week high list peaked on December 14th. That puts us almost a month into some kind of correction underneath the surface.

And this sort of behavior is fine in bull markets. Go back and look over the past 100 years. It's actually perfectly normal.

Last week we discussed what a bigger correction might look like, and what the market would have to do to hold on to its ongoing uptrend.

Let's remember, the Dow Jones Industrial Avg rallied 5000 points in 2 months. Give it a break.

See: New Year & New Trends

Among the most important groups of stocks comes Financials, of course.

Here is arguably the most important component in the U.S. Financials Index going out at new all-time highs...

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

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...