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

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

Yesterday, we explained how we're still approaching this recent rally with a high degree of caution.

Most names still find themselves below overhead supply, and this is a tape where whipsaws and fake-outs are likely to continue.

Beyond Ethereum and a handful of other names, this rally hasn't been widespread. Instead, most cryptos are still exhibiting generally weak action.

While this means there are still actionable ideas out there from the long side, we want to explore a higher-conviction trade over more substantial time frames that'll likely be prone to fewer whipsaws.

The Auto sector has been the flavor of the season. And by the looks of it, the season isn't over yet! We're here today to discuss another popular stock from this sector.

Shares of Apple stock just went out at the highest levels in history relative to the S&P500.

This is what we refer to as "Relative Strength".

Apple had originally peaked relative to the market almost 2 years ago towards the end of the summer of 2020.

That's when the Apple's underperformance first began.

And now here we are making new all-time highs once again:

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.

Warren Buffett filed his latest Form 4 yesterday, as Berkshire Hathaway $BRK continues to accumulate shares of Occidental Petroleum $OXY.

The additional 1.94 million shares leaves him with an ownership percentage just shy of 20%.

This is the video recording of the July 2022 Mid-month Conference Call.

We discussed:

• 34 Straight Weeks Of More New Lows Than New Highs
• Strong Negative Correlation between Stocks & Dollars
• DJIA & DJTA holding short-term support so far
• S&P500 Remains Below overhead supply
• Small-caps & Financials testing significant support levels
• Europe's STOXX 600 back to 2000/2007 highs
• Apple hits new All-time Relative Highs
• US 10yr & 30yr Yields run into 2018 highs
• Breakevens & EW Commodities peaked months ago before Yields
• Still no expansion in the new 20 day highs or 63 highs lists
• Commercial Hedgers remain historically long Crude Oil
• Gold, Silver & Gold Miners break down to new 52-week lows
• 10yr Minus 3-mo Yield Curve breaks down to follow 2s-10s
• Bitcoin & Ethereum hold above former cycle peaks
• New Trade Ideas: Both Long & Short

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 their...

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

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.

ETH Kicks Off Crypto Rally

It was a busy weekend for cryptocurrencies, and Ethereum, in particular. The world’s second-largest crypto just resolved higher from a bearish continuation pattern right at a key polarity zone. 

When patterns fail, it’s always great information. In this case, a downside resolution in the direction of the underlying trend was the higher probability outcome, but it didn't happen that way. Instead, buyers took control and forced an upside resolution. Another thing that makes this price action stand out is where it took place. Ethereum just dug in and reversed after a brief shakeout beneath the 2017 highs. As long as we're back above the prior-cycle peak of 1400, the bias is higher.

Key Takeaway:

• Stocks celebrating small wins.
• For evidence to improve we need to see sustained strength.
• Fed confronted with deteriorating economy while still waging inflation fight.

When new lows have exceeded new highs for 34 weeks (and counting) and the Value Line Geometric Index (a proxy for the median US stock) is no higher now than it was five years ago, even small amounts of good news get celebrated. We saw some of that on Friday.

A decline in the longer-term inflation expectations number in the University of Michigan Consumer Sentiment Survey helped fuel a broad stock market rally. Recall that it was an unexpected uptick in inflation expectations in the preliminary June data that prompted the Fed to raise rates by 75 basis points last month. Odds of a 100 basis point rate hike at next week’s FOMC meeting had been on the rise following the release of unexpectedly hot readings for CPI and PPI. By the...