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:

You certainly see it in life - the losers usually continue to lose. And winners win.

It's the same thing in the stock market. Winners tend to keep on winning, and the losers remain losers for a reason.

With the whole ESG scam unraveling over the past couple of years, the market has voted with their dollars.

That's what pays.

Not cute bed time stories. Actual Dollars.

Forget the narratives. I want to know what investors are ACTUALLY doing.

And as we have documented here consistently, the voting dollars are being used to buy Energy.

But I continue to be impressed with the strength in Energy stocks, despite the correction we've seen in Crude Oil Futures.

Bear markets are infamous for their counter-trend rallies.

Breakouts fail, and the charts are painted with false moves.

Throughout this bear market, traders have bought the breakouts to then dump the next day into an illiquid tape.

Given the gains we've seen over the last few days, I think it's important we step back.

From the Desk of Kimmy Sokoloff

Yesterday, the $SPX pushed its way through the 50-day moving average at 3,860, then reversed course to close below it.

I mentioned this is a resistance level where the market might need a breather.

We got a new Form 13D from our favorite corporate raider yesterday, as Carl Icahn revealed  an increased ownership stake in Southwest Gas $SWX.

Icahn now owns 9.8% of outstanding shares, a very slight uptick from the 9.7% he reported on September 7.

I understand the theories about Crypto Currencies being a scam.

"The whole thing is about to fall apart", they tell me.

And yea maybe.

That's entirely possible.

I don't really care that much either way. If it goes up, I hope to profit from it. And if all the coins go to zero, I'll make sure I'm not in them.

Other people losing money long crypto in that scenario is not my problem. I don't have the slightest interest or the time to care about other people's portfolios.

And I say that only to reiterate that I'm approaching this conversation with a very open mind.

Because we all know that the Bitcoin maxis and Ethereum folks can rarely have a civilized conversation, particularly with those who might disagree.

So to be clear, I do not care at all.

Welcome to the 2 to 100 Club.

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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.

From the Desk of Kimmy Sokoloff

Tech did not lead the way higher.

And the indices still chugged along.

From the desk of Willie Delwiche.

“This Is A Test. This Is Only A Test.”

The S&P 500 this month and last undercut its June low but it is now back above that key level. The same can be said from a sentiment perspective. The NAAIM Exposure index and the Bull-Bear spreads for Investors Intelligence and AAII in recent weeks dipped below their Q2 lows but have since recovered.

Why It Matters: Important lows often get re-visited one last time before trends turn and rallies become sustainable. It will be a lot easier for stocks to build on recent strength if optimism is increasing. It does indeed take bulls to have a bull market. Confirmation that this was just a test is twofold: staying above the Q2 lows and continued improvement beneath the surface (including seeing more stocks make new highs than new lows). 

In this week’s Sentiment Report we take a closer look at how investors are feeling and how (if at all) we can take advantage of it.

We continue to be handcuffed by earnings season. Some of the best setups we like right now are in stocks slated to announce earnings over the next week or two. As an options trader, I don't like to position ahead of imminent earnings announcements. That is tough binary risk to control.

Today's trade has earnings coming up in a little over a month from now, so that'll have to do. At least it gives us some time to build a little cushion. Because if we're wrong in this trade, it's likely we'll find out pretty quickly over the next two weeks.

We retired our "Five Bull Market Barometers" in 2020 to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.