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.
It's hard for me to have a conversation about the stock market without bringing up what's happening in bonds.
Think about it like this, the market cap of all US Stocks is somewhere around $40 Trillion. For the bond market it's over $120 Trillion.
Volatility in bonds tends to trickle down to other asset classes, especially stocks.
US Stocks really got going in the 4th quarter last year, once the US 10-year Note stopped falling in price.
I don't believe that was a coincidence.
But at this point, Large Speculators have on their most aggressive short position in bonds ever.
So in other words, what is historically the "dumb money", particularly at turning points, are betting more aggressively than ever that bond prices are going to fall and rates will now continue higher:
I’m traveling throughout Southeast Asia — to eight different countries — with my All Star Charts analyst Steve Strazza, giving presentations at local Chartered Market Technicians (CMT) Association events, meeting local traders, enjoying native cuisines, and just marveling about the similarities we traders from different corners of the world all share.
So for the rest of the month of July, I’m going to cut the preamble and get right to the action for you guys.
As such, here’s the trade I’ll be putting on today:
From the desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Our Hall of Famers list is composed of the 150 largest US-based stocks.
These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.
It has all the big names and more.
It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that which you can check out here.
The Hall of Famers is simple.
We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.
Let’s dive right in and check out what these big boys are up to.
Crude oil is breaking to multi-month highs. Copper is approaching the 4-dollar level. And Silver is ripping!
I’ll have more on the precious metals front Monday with your weekly Gold Rush.
Today, I’m focusing on the grain and livestock markets. The dropping dollar has helped line up a long list of fresh trade ideas: potential failed breakouts, possible failed breakdowns, and critical levels to trade against…
