Different market environments are conducive to certain scans and less so to others.
Coming off this perilous winter, strategies identifying short opportunities have been greatly rewarded. And, throughout the pandemic, it was the complete opposite.
Like we said in yesterday's note, half the battle is in understanding how to directionally position in the underlying trend. The simple fact of that matter is that many have been caught offside betting against names in substantial drawdowns.
Names like Coinbase, Marathon Digital, and, most recently, Silvergate have all sported notable short interest coming off this bear market.
Identifying this skew, we reintroduced our Freshly Squeezed scan. The idea is rather intuitive; we're simply looking for stocks that people are betting against. When a stock is heavily shorted, we know there are incremental buyers waiting in the wings.
As Strazza said in the latest Freshly Squeezed report,
It's the weekly currency edition of What the FICC?
Despite the overarching range-bound action and intraday indecision across the currency markets, I continue to find trade setups with well-defined risks.
As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!
One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).
Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.
But the scan doesn't just end there.
We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.
Last week was the first time in 45 weeks that the weekly AAII survey showed more bulls than bears. The most recent stretch of pessimism did not eclipse the Financial Crisis in terms of intensity (the bull-bear spread bottomed last year at -43%, versus -51% in March 2009). But it did set the record for persistence.
In the options market, summer flights priced in Boeing options are pretty cheap right now.
I think I'll be looking to take a flight to a fun European destination if I can get a bullish position in Boeing to pay for it. Maybe I'll even fly on a Boeing jet?
During our analyst meeting this morning, we kicked around a few bullish ideas, but it was this Boeing $BA chart that rose to the top:
We're going to get involved with a bullish options spread that gives us through the summer to most efficiently express this thesis.
It's been a minute since we've been able to say that, amiright?
But let's face it.
We're seeing these coins thrust to new quarterly highs, hitting overbought conditions in the process.
At its peak a few weeks ago, approximately 70% of our universe hit overbought conditions, while three-quarters of all coins reclaimed their 200-day moving average.
This is within the context of these coins coming off 80%, even greater than 90% drawdowns.
