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.

We recently decided to expand our universe to include some mid-caps…

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

The way we did this is simple…

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

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...

From the desk of Willie Delwiche.

It has an ominous name, but not much of a signal. The so-called “Death Cross” occurs when the 50-day average closes below the 200-day average. Today, for the 25th time since 1970, that will happen for the S&P 500. This table shows both where the S&P 500 tends to be in relation to its peak when these Death Crosses have occurred in the past and the experience of the index in the wake of past crosses.

In aggregate, forward returns following Death Crosses are not meaningfully different from any random day in the market over the past 50 years. This is more noise than news and these crosses mostly reflect an index that has pulled back from its peak. The S&P 500 is currently 13% below its January peak, which puts the current Death Cross in line with the historical pattern. The relationship between the 50-day average and the 200-day average describes an environment but is not likely to shape the path going forward.

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.

False Start of Failed Breakout?

The markets have been a bifurcated mess for more than a year now. During this time the relative strength from commodities and commodity-related stocks has stood out. Both have been on a tear and continue to rip higher. But despite the broad strength in commodities, Copper has gone nowhere since many risk assets peaked in May of last year.

That changed last week when Copper printed fresh all-time highs. Those new highs were short-lived though, as price quickly slipped back within its prior range. So was last week’s move in Copper a false start or a failed breakout? As any good technician, we want to err in the direction of the underlying trend, which is higher. But, we need to see prices agree before we have any conviction. For now, we want to remain patient and look to the key risk ratios and the bond market for clues to Copper’s next directional move. The direction in which...

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

• Our macro universe was red this week, with 85% of our list closing lower with a median return of -1.95%.
• This week, US 10-Year Yield $TNX was the winner, closing with a massive 16.24% gain.
• The biggest loser was Copper $HG, with a weekly loss of -6.35%.
• There was an 11% drop in the percentage of assets on our list within 5% of their 52-week highs – currently at 19%.
• 13% of our macro list made fresh 4-week highs,...

We've been overly obnoxious with our tone of mostly staying out of the Crypto market and playing defense.

There's been so little to discuss and so few actionable trades that our priority right now is waiting for reliable signals to suggest a resolution from this trading range.

Price action in most crypto assets is still range-bound. It appears 46,000 is the critical level for bulls to reclaim.

There are many mixed signals, so we have no read on current price action as of the writing of this report.

In light of global events, we're seeing significant market reactions all over the place. And it seems like the narrative changes on a daily basis. Now more then ever, as a Trader, is it important to turn off the news and follow price. Price doesn't lie.

One trend that has been signficant and showing no signs of stopping is the bullish breakouts we're seeing in energy, commodities, and materials.

And today's name is one of the bellwethers in the space that is beginning to breakout from a multi-year base.

In today’s action, there was a large inside purchase reported by Sequoia Capital in the food delivery company DoorDash $DASH.

Sequoia has been a long-time investor in the stock.

In other insider purchases, Durable Capital Partners reported a buy worth roughly $5 million in Duolingo $DUOL.

And an Ambarella $AMBA director disclosed a purchase of just over $1 million in his company’s stock.

Warren Buffett’s Berkshire Hathaway $BRK.A also disclosed more buying in Occidental Petroleum $OXY.

It's Saturday Morning Chartoons time. 

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.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

We debuted a new scan recently- The Outperformers.

The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Commodities have been on a tear, with the Bloomberg Commodity Index recently posting its best week since 1970 and the CRB Index rallying more than 25% year to date.

Despite the broad strength from commodities, Dr. Copper – a key economic barometer – has yet to break out like so many of its peers. 

After making a new all-time high last Friday, buyers were unable to sustain the move, and price retreated into its former range.

While it’s great to see so many other contracts trending higher, bulls really need to see copper join the mix. If this is truly a new commodity supercycle, it better break out from this consolidation. 

It is that important to the overall asset class.

Let’s break down the various technical scenarios for copper’s recent move and discuss what they mean for the entire space.

First, the move could have been a premature breakout:

We also call...

The hunt for options premiums to sell continues. And with VIX showing signs that it might want to give up the 30 level for a little bit, we may have the trend of implied volatility mean-reversion beginning to become a wind in our sails.

A quick perusal of the most liquid ETFs options markets that I follow revealed a surprising sector at the top of the list: Utilities. And the recent price action suggests to me we may have seen the $XLU ETF get a bit ahead of itself, and it could be due for a little consolidation.