From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the two weeks ended October 25, 2024. This report is published bi-weekly, in rotation 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 simply our proprietary lists of trending tickers, there’...

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

1. New trade today in USO.
2. No adjustments are needed today.
3. Exited XME position.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

This is NOT a political post.

So if you're one of these sensitive types who is just too mentally weak to put your politics aside when making decisions about the market, then you're in the wrong place Karen. 

For those of you who can be adults and actually focus on data and facts, here are some thoughts that might help you put the next couple of weeks in perspective.

At this point, I think it's pretty clear that the market has fully priced in a second trump presidency.

Here's a look at the betting markets showing the red line (trump) moving very aggressively to the upper right of the chart, while the blue line (harris) has been moving to the lower right of the chart.

You'll hear the conspiracy theories that a few guys behind the scenes are manipulating these markets because they are in favor of trump.

That's one way to look at it. 

Peter Thiel, a well-known republican, is an investor in Polymarket.

So it's certainly possible that him and his buddies are moving markets and just throwing money away to help influence political outcomes.

Yes. That is possible...

But here's how I see it. 

...

We're beginning to emerge from the crypto bear market, and I can see a glimmer of light ahead.

The possibility of Bitcoin reaching 100,000 feels real.

I think now is the moment to prepare yourself.

The best 3 month period of the year begins this week.

We know this.

But to me, the bigger question is how stocks did during what is historically the worst time of the year?

Remember how September and October are supposed to be terrible for stocks?

Well they weren't.

In fact, stocks rallied during September and October. All the major U.S. indexes were up.

Now we enter the Best 3 months: November - January. 

Here's what that looks like:

So if stocks couldn't go down in price during the worst period of the year, how do you think stocks will do when they're actually supposed to go up?

Zooming out, here are the returns of the major indexes during "The Worst 6 Months" of the year.

All of them were up double digits, when historically they were supposed to fall...

For me, we don't like to position ourselves according to seasonal tendencies.

The real value, in my experience, is looking back after the fact to see if the market acknowledged or ignored seasonal trends.

When the market is resilient during the bad times, historically that bodes very well for the upcoming...

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.

Each year, Americans buy over 600 million pounds of candy and eat over 1 pound each for Halloween.

It's a lot...

But are there opportunities to profit from Americans ritualistically eating way too much candy? You betcha!

Let's talk about it.

After a historic 190% run earlier this year, cocoa futures have formed a textbook consolidation pattern:

In addition, chocolate bears have failed to register an oversold reading as the bulls have maintained control during this consolidation phase.

We like owning cocoa futures above 6,900, with a target of 11,700 over the coming 2-4 months.

Sugar futures look poised to retest last year's high:

After rallying 20% in a single week last month, the sweet commodity has formed a sweet bullish continuation pattern. If and when this pattern is resolved, we want to own sugar futures in anticipation of a fresh leg higher.

In addition to the chart pattern, the bulls registered a 14-day RSI reading above 80 during the last leg higher, as they were in...

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...

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

1. New position in XLE.
2. No adjustments are needed today.
3. Exited USO and XOP at Profit Targets.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

In 2015 I was an entrepreneur, had my last knee surgery, and was still riding professionally from time to time—until my body finally gave out. 

I was also on the verge of starting my own fund while working for another one. 

In other words, I was busy.

My trading signals back then were based on 10-month highs which reflects how busy I was. 

We saw a new 10-month high by the end of the year, and that marked the beginning of one of the most legendary trends in financial history. 

When I first bought in, the backlash was intense. You were an “idiot” for investing in Bitcoin at that time. 

Then, the tide turned and Bitcoin skyrocketed from $300 to $20,000 in the following two years. 

Some mornings, I’d wake up in disbelief that some cryptocurrencies had doubled overnight. 

The one bet I will not be making is that the stock market finishes election week anywhere near where it began the week. 

In other words, there is a high likelihood of a large directional move following the election. And there will likely be some epic whipsaws along the way.

As such, it feels to me that options traders should start building a good mix of both bullish and bearish bets, as well as a wide variety of expirations so as to mute the volatility likely to be introduced to our portfolios.

I don't think we want to be too overweighted on delta-neutral positions (though I think it's a good practice to have one or two on at all times). I do think it is prudent to have some long-premium bets on that can return 5-10x in the direction of the trend. Simple long calls and long puts will do the trick.

Since my portfolio is leaning long at the moment (it is a Bull Market, you know...),...