From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as a market of stocks.

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as The Hall of Famers, The Minor Leaguers, and The 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

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We've adjusted a position in the Paid-to-Play portfolio today:

From the Desk of Kimmy Sokoloff

We have CPI data for June coming out at 8:30 a.m. ET.

I'll hold off on sharing stock ideas this morning until we have clarity on those numbers.

While many investors have been focused on arbitrary lagging indicators like the economy, we rather keep our attention on reality.

We're grown adults. We don't need bedtime stories to go to sleep at night. So fairytales about recessions, or inflations, or bidens are just not anything we're interested in.

We get paid to sell things at higher prices than where we buy them.

And the bet we've been making for a long time is that the negative correlation between the US Dollar and stocks will remain in place.

That bet has paid off handsomely for us and anyone listening.

So as investors we all have a choice. Do we bet that the correlation is all of a sudden going to change tomorrow? Or do we bet that things just remain the same?

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The two major catalysts that will propel gold to new all-time highs are veering in different directions. 

US real yields are challenging fresh decade highs (not ideal for a gold rally) while the dollar is pressing against its year-to-date lows.

A breakdown in the US dollar index $DXY would no doubt send gold bugs dancing in the streets everywhere around the world.

I believe a weaker dollar remains critical to the next secular uptrend in Gold. But do real yields need to roll over as well? 

I’m leaning toward no. Here’s why…

From the Desk of Kimmy Sokoloff

The market overall was up and away today.

We have CPI data for June coming out at 8:30 a.m. ET and more Fed speakers on the schedule for tomorrow.

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

We've adjusted a position in the Paid-to-Play portfolio today:

The two major catalysts that will propel gold to new all-time highs are veering in different directions. 

US real yields are challenging fresh decade highs (not ideal for a gold rally) while the dollar is pressing against its year-to-date lows.

A breakdown in the US dollar index $DXY would no doubt send gold bugs dancing in the streets everywhere around the world.

I believe a weaker dollar remains critical to the next secular uptrend in Gold. But do real yields need to roll over as well? 

I’m leaning toward no. Here’s why…

First, a quick reminder as to why real yields represent a potential headwind for Gold: 

An inverted chart of the US 10y real rate looks almost identical to a chart of gold futures, as the inverse relationship between these two has been strong over the past 15 years.

So it stands to reason that rising rates would hinder any meaningful rally in Gold. 

And so far, they have. Gold has gone nowhere (down roughly 10%) as the 10y real yield has risen almost 300bps since March 2022. That’s not much of a decline considering the explosive increase in the real yield....

The largest insider buy on today’s list comes in a 13G filing by Mackenzie Financial Corporation.

The Canadian investment firm revealed an increase in its ownership stake in CAE Inc $CAE from 7.30% to 10.05%.

From the Desk of Kimmy Sokoloff

Today we have a Fed speaker and tomorrow we have CPI.

$IWM is clearly trying for 190, and all's right with stocks.

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under The Hood, where we'll cover all the action for the week ended July 7, 2023. We publish this report on a bi-weekly basis, rotating it 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.

Click here for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options...