From the Desk of Ian Culley @IanCulley

What goes up must come down.

It’s an old commodity market maxim that never fails to deliver. The cattle, sugar, and OJ markets embodied this truth last year. 

But as the calendar flips to 2024, it’s time to track those markets that failed to launch in 2023.

Here are three of my favorites…

Coffee

Unlike other softs such as cocoa and sugar, coffee failed to produce monster gains last year. 

But it’s now attempting to carve out a multi-year double bottom:

Notice the resistance level at approximately 197 coincides with a key retracement level and a shelf of former lows. That’s our breakout level.

Also, note that the 168 level proved an excellent area to define our risk and get long well before our current line in the sand. A similar early-entry opportunity is taking shape in the cotton market. 

But first, a daily chart of March coffee:

I like buying coffee futures on a decisive close...

From the Desk of Ian Culley @IanCulley

US treasuries finished 2023 with a bang, hitting our initial targets before Christmas.

But the long-bond trade is losing its luster.

Resistance is now coming into play as the bond market catches its breath…

Check out the US Treasury Bond ETF $TLT with a 200-day simple moving average:

I’m not a big fan of moving averages. I don’t like how they distract from price and create extra noise on the charts.

Regardless, many market participants track the long-term moving average. Bond bulls are shouting their battle cries as TLT peaks its head back above the 200-day mark.  

So, is it time to get long bonds?

No!   

The 200-day moving average is still sloping downward when we take a step back with a weekly chart:

US T-bonds remain in a structural downtrend. Plus,...

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

1. New Position in ARKK.
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 only transaction on today’s list comes in a 13G filed  by Riposte Capital.

The firm increased its stake in SilverBow Resources $SBOW from 7.75% to 9.70%.

Santa didn't show up this year for his annual Santa Claus Rally.

Historically, that usually precedes some underwhelming years for the S&P500.

This is the first leg of the January Trifecta, which also includes "The First 5 Days" and the "January Barometer".

Does the S&P500 put in a positive First 5 days of the year?

As January goes, so goes the rest of the year, is how I learned it.

We'll continue to monitor the rest of the Trifecta as the data comes in.

But first, let's reiterate that the S&P500 did NOT rally during a seasonally strong period known as the Santa Claus Rally.

And while this "indicator" is normally reserved for the S&P500, I wanted to...

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...

From the Desk of Ian Culley @IanCulley

It’s a new year with unlimited possibilities!

Even ol’ King Dollar is turning the page, embracing 2024 and everything it offers with open arms. It’s shaken off the selling pressure from 2023 and appears ready to turn over a new leaf. 

But a bigger dollar rally might need a little help from a nearby friend. 

More on this idea in a second. 

First, let’s check out the US Dollar Index $DXY chart…

The DXY is finding its footing following a brutal holiday season (dropping nearly 5 percent since November 17):

The DXY stopped catching lower right where we would expect: a shelf of former lows at approximately 101.

A period of US dollar strength would make sense as the DXY mean reverts higher, especially as it enters its most favorable month of the year.

Dollar strength likely means...

Healthcare is an early leader out of the clubhouse to start the year. We've already seen some big moves in names like Merck, Amgen, and Lilly.

This is a sector rotation that makes sense to us. And for this reason, today's trade is in a name we think will play catchup to these leaders.

But first, lets zoom out to observe this chart of $PFE, highlighting the stock sitting near a level that has acted as strong support for numerous times over the past decade:

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

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

Let's dig in!

It's a new year. But does that mean we need to see new trends?

Well I think we're definitely going to see new trends emerging. But I have a strong suspicion that a lot of the old trends will remain in place as well.

If you recall, back in July we were looking at a bunch of the leading groups running into their former highs from late 2021.

These groups included Industrials, Semiconductors, Homebuilders and Mega-cap Technology.

From the Desk of Steve Strazza and Alfonso Depablos

The largest transaction on today’s list comes in a Form 4 filing by James F. Lynch, director  of Globalstar Inc $GSAT.

Lynch reported a purchase of GSAT shares with a total value of $963,700.

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...