Last Friday’s action sent flashbacks of 2022 across my screen.
It was all King Dollar last week as risk assets and bonds sold off in tandem.
But before we all get carried away talking about the next leg higher for the dollar, let’s zoom out to get a read on where the DXY truly stands…
In the middle of a short-term range.
The US Dollar Index $DXY finished last Friday, posting its best week since peaking in late September 2022.
But it’s been stuck between 105 and 101 since December:
The DXY might have gained 1.5% last week, but it’s stuck below a key retracement level. It’s a range-bound mess like much of the market despite the recent bout of strength.
The largest insider buy on today's list comes in a Form 4 filed by the co-founder and executive vice-president of DISH Network Corporation $DISH, James DeFranco.
DeFranco revealed a purchase of $18.5 million worth of DISH shares.
Welcome back to Under the Hood, where we'll cover all the action for the week ended May 12, 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.
I'm filing today's trade under the category of "Hard Trades." Not because it's particularly hard to execute or because it's a complicated multi-legged spread. It won't require an excessive amount of margin to get positioned nor is there any risk of unlimited losses.
It's hard because people might look at the trading action of the past few days and think that it's "gone too far" and "I should wait for a pullback."
And traders who think that way may be right.
But here's the thing: sometimes the best trades to get into are the best precisely because they are the "hardest" to pull the trigger on. And that's where our opportunity is. Those of us who fight through the conventional wisdom of average traders and get positioned ahead of the crowd will be lifted later on by those same traders who were "waiting for a pullback" and put an ever-rising bid underneath our stock that fuels our future gains.
