We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

The largest insider transaction on today's list is a Form 4 filing by Sameer Gandhi, a director at Freshworks $FRSH.

Gandhi reported a purchase of FRSH stock worth $11.5 million.

From the Desk of Ian Culley @IanCulley

Sometimes you have to go back to the basics. 

One simple concept has served me well over the years: Don’t fight the primary trend.

There are many other best practices I use to maintain my sanity regardless of underlying market conditions. But sticking with the underlying trend is fundamental to any trader’s success. 

As Charles Dow established more than a hundred years ago, trends persist! This concept is one of the key Dow Theory tenets and forms the foundation of any trend-following strategy.

It’s our job as technicians, traders, and investors to identify the primary trend and ride it as long as possible. 

And it’s difficult to imagine a stronger trend in 2022 than the rising dollar.

From the desk of Willie Delwiche.

Key Takeaways:

• Labor market imbalances are fueling a persistent rise in inflation
• Median CPI hitting new highs means inflation has not peaked 
• Equities will need to reckon with more Fed tightening and higher bond yields

Surging inflation over the past year has always been about more than just planes, trains, and automobiles - how much they cost to purchase and how much they cost to operate. Too much of the focus has been on the inflation outliers like the spike & cooling in used car prices or the surge and collapse in gasoline prices. Those are post-COVID talking points, but not really drivers of the underlying trend in inflation. So while headline CPI and (to a lesser extent) core CPI get the headlines, median CPI continues to trend higher, as it was doing pre-COVID and as it has been doing in recent months.

Imbalances in the labor market are driving this trend - which suggests that getting inflation under control will be inconsistent with a soft-landing for the economy. This isn’t just...

We've adjusted a position in the Paid-to-Play portfolio today:

We're a day away from the anticipated Ethereum merge, by which the network will transition from a Proof-of-Work to a Proof-of-Stake model.

Investors are clearly hedging their positions moving into this event, with Ethereum perpetual swaps trading with rather bearish funding rates.

And Ethereum quarterlies have been trading firmly in backwardation, pointing to a strong flight to hedging positions.

The most significant insider activity on today's list comes in a Form 4 filing by Kelcy Warren, the executive chairman of Energy Transfer $ET.

Warren reported a purchase worth roughly $29.2 million.

PSU Banks are generally slow to catch up on a bullish trend. But speed is not what we're after. We're trying to lock into accuracy. So we wait patiently until the alarm bells go off and then we look into PSUs.

Well, its that time again! We have some stocks here that are displaying strength and some that are just breaking out. Let's take a look at this list, shall we?

Let's start off with an index view, just to see where we're at in the trend.

Guess what we have at an index level when it comes to the PSU Banks? 2-year highs, folks! PSUs had been struggling to sustain above the crucial level of 2,700. As you can see, the price movement in the recent past has been full of whipsaws. We finally have new highs coming off of those whipsaws as well.

With the price gaining momentum, we're looking out for targets close to 3,445 and 3,730.

Click on the chart to zoom in.

Ok, so the trend is positive on an absolute basis. But do we have any update on relative strength?

We may.

Key Takeaway:

• Getting back to “Yes” on our Bull Market Re-Birth Checklist still requires some heavy lifting.
• Beneath the surface, stocks are getting back in gear.
• The Fed isn’t a friend and overcoming higher bond yields could be a challenge for stocks.

Stocks turned higher last week, and while Friday saw more new highs than news on the NYSE for the first time in two weeks, it was not enough to prevent a third consecutive week of new lows outpacing new highs (on both the NYSE and NASDAQ). Friday’s strength was sufficient to produce an encouraging up-side volume thrust and our short and intermediate-term risk indicators moved back into positive territory last week. If stocks can build on that progress, we could soon be hitting “Yes” on a number of our Bull Market Re-Birth Checklist criteria. But there is still plenty of work to be done.

From the Desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to...

From the Desk of Steve Strazza @sstrazza

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 the stock is about to move in...

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today: