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The Hall of Famers (03-10-2023)

March 11, 2023

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. Click here to check it out.

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.

Here’s this week’s list:

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Why Friday’s Energy Bounce Has More Upside

March 11, 2023

Energy commodities are holding up despite last week’s selling pressure.

No, I’m not talking about natural gas – that rope snapped months ago.

But the rest of the main players – crude oil, heating oil, and gasoline – rebounded heading into the weekend. And when I look at the charts, Friday’s strength might be the beginning of a more sustained advance for energy.

Check out the equal-weight energy index:

It’s finding support where I would expect – the prior-cycle highs from 2018 and a key retracement level off the 2020 low.

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[Options Premium] Stepping Into the Industrial Swamp

March 10, 2023

The Volatility Gods are offering us more tempting options premiums to sell. Is it a trap? Perhaps.

But I can step into the morass with a defined risk delta-neutral credit spread in a sector ETF that looks rangebound.

This puts me in a position to profit from a mean-reversion in volatility while protecting against further scary market action.

 

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Here’s Why Banks Are Breaking

March 10, 2023

From the Desk of Ian Culley @IanCulley

US bank stocks big and small took a beating Thursday, with the Bank ETF $KBE posting its largest single-day decline since 2020.

The steep sell-off came on the heels of Silicon Valley Bank’s $SIVB Wednesday announcement of a $1.8B loss, mainly due to accepting unrealized losses in US Treasuries.

Based on SIVB’s acute exposure to the tech industry, you can argue larger banks with more diversified portfolios and clients don’t carry the same risk. And they don’t.

Regardless, the next chart reveals a storm brewing beneath the surface...

Check out bank stocks (KBE inverted) overlaid with the US Treasury 2s10s spread:

I inverted KBE to highlight the strong relationship between banks and the yield curve. The two lines look almost identical over longer timeframes.