New issue? check

Near all-time highs? check

High Short Interest? check

Today's trade has all the ingredients for a monster breakout. This of course is no guarantee of a win, but if we're right, the payoff will be incredibly worth the risk.

Investors are becoming restless.

Silver is dancing around a significant breakout level. And Gold continues its sideways chop for the third straight month.

It’s certainly been a challenging time to hold precious metals trades – even for the most patient investors.

To kick off the third quarter,  let’s utilize fresh monthly data to step back and review the primary trends for Gold, Silver, Platinum, and Palladium.

In today’s Daily Digest, we’ll review the following:

1. New position in XHB.
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.

Let’s dig in!

This past February the market was running hot!

Too hot.

We saw some of the most bullish sentiment readings in years. And this sentiment came after a historic rally for equities throughout the 4th quarter last year that couldn't miss. Everything was working.

But things can't just go up forever. They need to rest eventually, and reset some of that excessive optimism.

That's exactly what happened.

Despite some of the growth indexes making new highs, a lot of the most important groups of stocks have done absolutely nothing since February.

Look at Consumer Discretionary, Financials, Industrials and Healthcare trading sideways to down this entire time:

I've been maintaining a neutral short-term bias for the last five weeks, which has helped us keep away from much of the precarious action over this period. But I'm seeing mounting signs that point to a tradable low being carved, and as such, I'm changing our short-term bias from neutral to bullish.

Bitcoin is finding support at a key level alongside many altcoins. Further, this is within the context of a wider reset in a longer-term bull market.

I'm being told that the Consumer is dead and can't afford anything.

That's why "it's only the high end retail" that is doing so well....

Take Williams-Sonoma for instance. It's harder to afford the things they sell at this place:

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.

From the Desk of Steve Strazza @Sstrazza

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 $3T – to some of the new-age large-cap disruptors such as Arista Networks and Crowdstrike.

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:

From the Desk of Ian Culley @IanCulley

Our cotton and sugar trades are working. Coffee is raring to go.

And crude oil is pushing toward a solid first-half finish.

Beyond that, commodities are dribbling lower.

Let’s review an energy contract that broke out two months ago and has never looked back—Natty Gas!

Natural gas futures are carving out an eighteen-month base below last year’s high:

I outlined our bullish outlook in late April. Natty Gas ripped the following week, rallying more than a dollar in just six weeks.

Now, price is consolidating within a twenty-percent range (potential right shoulder):

From the Desk of Steve Strazza @Sstrazza

While the market remains a mixed bag and participation is lacking, we're still seeing evidence of risk appetite.

How do we know?

The stocks that investors are betting against the most are making big moves... to the upside.

And we know just what to do in these environments.

We find the most heavily shorted stocks in our freshly squeezed universe. We wait for momentum to come into these names, and then we ride them higher with the squeeze.

We got new short data recently, so let's talk about how we're playing it.

Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions. When a stock is shorted, it means incremental buyers are waiting in the wings to close out their bearish bets.

We love this, as new buyers are the one true catalyst for higher prices.

When shorts are proven wrong, they become buyers of the stock. In many cases, this happens as momentum flows into these names and fuels massive short-covering rallies.

From the Desk of Ian Culley @IanCulley

Our cotton and sugar trades are working. Coffee is raring to go.

And crude oil is pushing toward a solid first-half finish.

Beyond that, commodities are dribbling lower.

Let’s review an energy contract that broke out two months ago and has never looked back—Natty Gas!

It's a bull market. No question. But that doesn't change the fact that I'd still like to add some downside diversification to my portfolio in the weakest names the stock market has to offer, just in case.

Today's short trade candidate appears to be hanging on the precipice of a potentially swift and brutal fall. This is as good an opportunity as I can see to help protect my portfolio in the event we see a market pullback.