From the Desk of Kimmy Sokoloff

We had a nice ramp up yesterday. I called out $SPY at 434.34 for a move to 436.60 in the Live Trading Room.

The market is pulling in this morning, and Fed Chair Jerome Powell will be speaking at the open.

From the Desk of Ian Culley @IanCulley

Most emerging market currencies have been in beast mode.

The Chinese yuan is a notable exception.

In fact, most Asian currencies haven’t fared well against the dollar over the trailing three months.

Latin American and Eastern European currencies – mainly the Brazilian real and the Mexican peso – are driving these markets.  

Analyzing these currencies through the Emerging Currency Fund $CEW as it makes new 52-week highs is useful.

But I’m more interested in the Chinese yuan as it slips and slides against the dollar.

Why? 

China represents the world’s second-largest economy.

And, based on the charts, the yuan could provide valuable insight into the direction of US stocks…

Check out the relationship of the US dollar to the offshore yuan, or the renminbi (USD/CNH):

“What are you afraid of?”

JC posed this question to me yesterday on the Morning Show.

For context, he was asking me about our upcoming 21-day trip to 8 cities in Southeast Asia.

I might have surprised myself when I quickly and confidently answered: “Nothing.”

And I meant it.

I’ve actually been thinking a lot about this topic lately.

“Fear” is such a powerful and loaded word. It toys with our emotions. While often protecting and keeping us safe, our fear-stoked emotions also can trigger us into making poor – and sometimes awful – decisions.

All our best-laid plans go out the window when fear takes over.

Franklin D. Roosevelt, the 32nd President of the United States said it best: “The only thing we have to fear is fear itself.”

This is doubly true for traders. We need to do everything in our power to keep our positions or portfolios structured so that nothing can scare us. Because when we’re scared we lose all sense of control. We lose rationality. We lose perspective. And then we either rush prematurely for the exits or worse, double down on our mistakes.

We need to fear “Fear.”

From the Desk of Kimmy Sokoloff

I mentioned this morning that odds favored a bounce.

$SPY broke above its eight-day moving average and headed higher.

The next new position in our Paid-to-Play portfolio is:

The most significant transaction on today's list comes in a Form 4 filing by Hadi Partovi, director of Axon Enterprise Inc $AXON.

Partovi reported an AXON purchase worth $4.7 million.

From the Desk of Kimmy Sokoloff

$SPY and $QQQ had played catch-up to $DIA and $IWM, but they've moved down to their respective 21-day moving averages.

We've been heading lower for a week now, and we have a holiday coming up next week.

The market typically likes to rally before a holiday weekend.

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended June 23, 2023.

This report is published bi-weekly and rotated with The Minor Leaguers.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.  

We use a variety of sources to generate the list of most popular names.

There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

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.

From the Desk of Ian Culley @IanCulley

Buyers are holding the line. 

The former 2011 highs remain front and center for gold futures – and all precious metals.

These shiny rocks will experience increased selling if gold slips back below those former highs marking the prior commodity supercycle peak. 

Silver, palladium, and the Gold Mining ETF $GDX are already printing fresh lows. And new multi-month lows for the silver/gold ratio indicate dwindling risk appetite.

These aren’t the type of developments that support a sustained uptrend.

Yet this action hasn’t deterred gold bugs.

Despite every reason to sleep in and shirk any and all responsibilities, they continue to show up right on time…

From the Desk of Kimmy Sokoloff

It was a choppy market today, with the indices pulling in.

We'll see how $SPY handles the 430 area.

While the bull market in U.S. Stocks continues to be discovered by all the latecomers here in the States, the strength in International stocks continues unabated. Some of the strongest moves have been happening beyond our shores.

Today's trade leverages cheap options volatility for an attempted run back towards all-time highs and beyond.