I can’t think of a stronger trend than the dollar-yen last year. It absolutely ripped to the point we were joking everything priced in yen looked good – even gold!
But it wasn’t the only market trending higher at the time. The US dollar and interest rates also rallied together.
Today’s USD/JPY strength raises a painful question for many investors…
Will interest rates and the US Dollar Index $DXY follow?
Before we delve into the broader implications of a USD/JPY rally, let’s outline the setup for those who trade forex markets.
Check out the dollar-yen reaching its highest level since November 2022, completing a six-month consolidation:
The Technology Index made another new 52-week high on Monday.
This is becoming a habit.
Apple carries a huge weighting in that Index.
So as some people get distracted with how Apple's $2.75 Trillion market cap is now bigger than the entire Russell2000 Index, I'm more interested in how quickly Apple can get to $5 Trillion.
I think it can happen pretty soon.
Look at these massive moves in market cap that can happen in a relative short period of time.
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, a company must have a market cap between $1 and $4B.
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.
The bears have found a new home: gold mining stocks.
Silver’s breakdown earlier this month raised the caution flag for the entire precious metals space.
Less than two weeks later, gold futures and mining stocks are falling under the wrath of increased selling pressure. Precious metals bears are winning the battle as support levels fall to the wayside.
Meanwhile, the bulls are reluctant to leave without a fight…
