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Base and Industrial Metals: From Failed Breakouts to Fresh Breakdowns

July 19, 2024

From the Desk of Ian Culley @IanCulley

Risk assets are taking a hit.

The major equity indexes are seeing red. Crude oil is slipping below eighty bucks. And gold is failing at new all-time highs.

Perhaps the markets are navigating the summertime blues – a tune base and industrial metal investors have been humming for months.

Remember copper’s failed breakout in May:

Oof!

Dr. Copper is living up to the trading adage that from failed moves come fast moves in the opposite direction.

The futures continue to fall – down almost 8 percent this week. 

Meanwhile, track the 4.16 level for potential support:

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It’s Time To Buy the Bios

July 19, 2024

From the Desk of Steve Strazza @Sstrazza

Breadth has expanded in a big way since last week, with more and more stocks finally joining in on the bull market as big-cap tech leaders take a breather.

At the sector and industry group level, our list of indexes that are in uptrends continues to grow.

Some notable new members on this list include regional banks, small-caps, and various speculative growth funds.

After years of basing in accumulation patterns, these groups are just now completing primary trend reversals.

What does this mean?

In its simplest form, it means there are more ponds we can fish in for long opportunities. There are more stocks -- and groups of stocks -- that are in uptrends.

It’s just more options for us.

One of the groups that has broken out with authority recently is the biotechs.

Regardless of what index you're looking at, the path of least resistance is now higher for this health care subsector.

We’ve identified some of the strongest biotech stocks with asymmetric risk/reward setups and clear levels to trade against.

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International Hall of Famers (07-19-2024)

July 19, 2024

From the Desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.

We've also sprinkled in some of the largest ADRs from countries that did not make the market cap cut. 

These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.

It's got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.

The beauty of these scans is really in their simplicity.

We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness.

Let's dive in and take a look at some of the most important stocks from around the world.

Here's this week's list:

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Base & Industrial Metals: From Failed Breakouts to Fresh Breakdowns

July 19, 2024

From the Desk of Ian Culley @IanCulley

Risk assets are taking a hit.

The major equity indexes are seeing red. Crude oil is slipping below eighty bucks. And Gold is failing at new all-time highs.

Perhaps the markets are navigating the summertime blues – a tune base and industrial metal investors have been humming for months.

 

Dow's Largest Stock Breaks Out!

July 18, 2024

Is it bearish when the largest component in the Dow Jones Industrial Average breaks out of a multi-year base to new all-time highs?

To be clear, we're talking about the world's most important stock market index here. And UnitedHealth represents over 8.5% of the entire Papa Dow.

Look at this chart. While people are telling you that the market is in a bubble, things are parabolic and this is unsustainable, the largest weighting of the most important stock market gauge hasn't even done anything for years.

Until now...

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2 to 100 Club (07-17-2024)

July 17, 2024

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As most of you know, we use 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.

Market Internals Hit New Highs

July 17, 2024

Counting is a lost art.

Humans love their short cuts.

Rather than taking the time to actually go one by one counting each of the stocks that are going up, down, or sideways, humans would rather skip that altogether in favor of their favorite Index or some kind of statistic.

 You don't need any sophisticated math skills in order to count how well or poorly the stock market is doing.

It's actually incredibly simple. 

Humans just don't want to do it.

And that's the arb.

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Freshly Squeezed (07-16-2024)

July 17, 2024

From the Desk of Steve Strazza @Sstrazza

The stock market is in the middle of one of its fiercest multi-day rallies in recent history.

Since last week, there has been a notable expansion in breadth, with areas like small caps, regional banks, biotechs, and speculative growth joining the bull market party.

Long story short, investors are beginning to move out on the risk spectrum and embrace some of the riskiest stocks the market has to offer.

Another way to see this offensive positioning is by analyzing the performance of the stocks that investors are betting against the most.

Names with sky-high short interests continue to work in this environment.

As such, it's time to run it back with another Freshly Squeezed report.

Here's how we do things...

We find the most heavily shorted stocks in the market. We wait for momentum to come into these names. And then we ride them higher as the bears get squeezed.

We got new short data last week, so let's dive in and talk about it.

Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions.

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🚨 Special Crypto Report

July 17, 2024

I believe there to be a rather spectacular opportunity lining up in crypto markets. We've seen a decent portion of tokens give up their entire bull market gains and are now back to where they started.

If you're making the bet, as I am, that crypto and web 3.0 aren't going away anytime soon, I think this recent calamity in the price action of these tokens present a rather favorable opportunity.

I outline my thinking as well as twenty trade ideas I like to take advantage of this.

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The Dollar Can’t Stop Stocks

July 16, 2024

From the Desk of Ian Culley @IanCulley

The bull market is back! 

The major indexes are hitting new all-time highs, and so is gold

Small-caps are ripping. Crypto is ripping. And the most heavily shorted names on the street are squeezing higher.

I’d expect the US dollar to break down as stock market bulls rush to put their greenbacks to work. 

Instead, the US Dollar Index $DXY is holding steady. Dollar-yen is refusing to roll over.

And risk-on commodity currencies – the Australian, Canadian, and New Zealand dollars – are failing to trigger buy signals.

Stock market bulls don’t seem to care about the lack of risk-on signals from global currencies.