From the desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended December 9, 2022. 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.

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

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

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

This is one of our favorite bottom-up scans: Follow the Flow.

In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.

Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they’re doing so for one reason only: because they think...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Running Out of Gas

After failing to hold a breakout to new all-time highs earlier this year, gasoline futures have fallen by roughly 50% in the past six months. Last week, both crude oil and gasoline continued their slide by taking out their 2018 highs. As long as energy futures are below these prior-cycle highs, we want to approach the entire sector with caution.

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

• This week, our macro universe was negative, as 81% of our list closed lower with a median return of -1.44%.
• The Volatility Index $VIX was the winner, closing with a 19.78% gain.
• The biggest loser was Oil $CL, falling -11.20%.
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 4%.
• 9% of our macro list made fresh 4-week highs and 6% made new 13-week highs....

The S&P 500 fell 3.4% last week, the 11th time this year that the index was down 3% (or more) in a single week. Only 2008 and 1974 had a larger number of such declines. Paired with the 9 times the S&P 500 has rallied 3% or more in a single week this year, 2022 has now moved ahead of 2009 and is only in third place (still behind 2008 and 1974) with 20 weekly swings of 3% or more in either direction.

More Context: Stock market strength and volatility have been inversely correlated for decades. Volatile years tend to be weak and quiet years tend to be strong. The decline in the S&P 500 last week alone was larger than the largest peak-to-trough decline experienced over all of 2017 (one of the quietest and most consistently strong years in stock market history). This year’s volatility has been accompanied by the smallest percentage of days with more new highs than new lows in more than 50 years. While we are seeing relative leadership shift, persistent strength remains elusive.      

In our ...

We've currently only got one delta-neutral "income" trade on the books right now, but that one will be coming off sometime this week as it is comprised of December options which expire this Friday.

In a perfect world, I always prefer to have a least some delta-neutral short premium exposure in the portfolio to help us compensate for any sideways chop that the markets might serve up to our existing directional bets. It's a a nice portfolio diversifier.

With this in mind, today's trade will be in an ETF that is currently trading smack-dab in the middle of a four month range that I expect will hold for a least a few more weeks. 

The next new position in our Paid-to-Play portfolio is:

Over the last few months, I've started taking my fitness and my health more seriously.

In my first fourth months of strength training, I packed on 30 pounds and added close to 100 pounds on my squat and deadlift. I started out at a tiny frame for my height, so my progress has been no surprise.

While I've been growing at this rate, I've needed to prioritize my recovery. That meant eating tons of food, getting plenty of sleep, and only training three days a week.

It isn't rocket science.

In fact, it's the very physiology of training: stress, recovery, and adaption.

Without sufficient recovery, there is no growth.

Whether or not you're on a fitness journey, I think we can all relate to the pleasure of a weekend recovery. These two precious days allow us to review the events of the prior week while planning ahead for the days to come.

Our Monday crypto letter is a manifestation of this recovery process. It's our weekly "state of the market" that documents how we're approaching crypto as a collective.

I certainly get a ton of value from putting my thoughts down on paper.

Not only does it allow me to coherently structure...

From the Desk of Kimmy Sokoloff

This is going to be a volatile week, with CPI data tomorrow and the Fed on Wednesday. Be on your toes, monitor your positions, and have your stops tight.

The indices are in a battle zone. The $SPX is trading between support and resistance. The pattern is tight. $SPY needs to get above 398 in order to head higher, simply put.

The largest insider transaction on today’s list is a Form 4 filing by Edward Joseph Shoen, president at AMERCO $UHAL.

Shoen revealed a purchase of UHAL worth roughly $16 million.

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

Remember when they told you Gold was a hedge against inflation?

It wasn't.

Remember when they told you Gold was a safe haven asset?

It wasn't.

Remember all those times the Gold bugs made up fairy tales about future price appreciation for their rocks?

It never happened.

And so here we are. Well over a decade later, Gold prices are actually still down 6% from their 2011 highs. Silver is somehow still down over 50% from those highs.

Think about the opportunity cost of owning precious metals instead of pretty much anything else.

So. Is this time different?

Is this the time for Gold to finally shine?