From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing this is by identifying the strongest growth stocks as they climb the market-cap ladder from small- to mid- to large- and, ultimately, to mega-cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B), they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn't just end there.

We only want to look at the strongest growth industries in the market, as that is typically where these potential 50-baggers come from.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during...

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

We could sit back and speculate on what measures the Federal Reserve is likely to take to curb inflation. But it wouldn't change the fact that inflation is already here.

We’d rather focus on what market participants are doing now to position their portfolios for these inflationary pressures.

Since last year, inflation has gripped markets, and we don’t foresee it going away anytime soon. We think the best course of action is to get used to this environment and focus on assets that tend to perform well during periods of inflation.

One of our favorite ways to measure inflation expectations is by analyzing Treasury Inflation-Protected Securities (TIPS) versus Treasuries.

Relative strength from TIPS implies that investors are positioning themselves for a general increase in the prices of goods and services. That’s exactly what we’re seeing today.

Let’s take a look and discuss what we want to do about it.

Here’s an overlay chart of the $TIP/$IEF ratio and the US five-year breakeven inflation rate:

...

Over the last few weeks and months, the market has been messier than before. With so much going around, the most valuable thing we like to do is follow the price action.

The beginning of this week started with great strength coming through from the Metal stocks and we're here to highlight just that today.

Read on to know if your favourite stock made it to the list!

Metals, and here I mean base metals, have been doing the bulk of the lifting with Equity and Currencies moving sideways. Commodities have been showing a clear path of trend and have been the more profitable area to be invested in.

Take a look at our custom Equally weighted base metals chart below. Bottom left to top right. That's the signature of any good trend in a market. And this chart is doing just that.

Click on the chart to zoom in.

Let's take a look at what the metals sector is looking like.

This is the Nifty Metal monthly chart. Notice how the price has been moving sideways for close to eight months now. But what is also important...

I feel like this has been the lead for many blog posts recently, but the trend continues: options volatilities continue to remain elevated across the board with $VIX holding above 30, and this makes me want to continue favoring strategies that are net short options premium.

But with the trade today, we're going to leverage options premiums to help us finance a bullish bet on NASDAQ stocks.

It started out with JC and I wanting to simply sell premium, but when we looked into $QQQ options it became pretty clear that we could get paid handsomely if recent lows end up becoming a pivot to higher prices and we took some put premiums to buy out-of-the-money calls.

As a trader, it's your job to find an edge.

There's quite literally an infinite amount of strategies, systems, and indicators you can integrate into your process.

But, at the end of the day, mastering just a select few will likely generate alpha as opposed to creating inconsistency in your approach.

Think about it: If you go to the gym, you have a structured program. You don't go to the gym and aimlessly decide on random exercises. You have a rigid plan that you're going to build on top of the lifts you did the workout before.

Trading's the same.

You don't need to switch between every time frame, make every decision using a different indicator from the last, or follow someone else with different objectives from yourself into our trade.

You find repeatable setups where you can find your edge.

For instance, you may only trade in the aftermath of liquidity cascade events that take place a handful of times every year. Mastered well enough, a few well-calculated trades in similar conditions can make your entire year.

In day-to-day life, being a "Jack of all trades, master of none" might serve you well.

But, when...

This is the video recording of our March 1st Monthly Charts Live Strategy Session

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

Currency markets are reacting to the war that’s broken out in Europe.

In the past four trading sessions, the Russian ruble has dropped more than 1,000 pips against the US dollar.

And, with fear growing that these initial days of fighting will turn into a protracted conflict, weakness is striking the euro as well.  

Let’s take a look at the EUR/USD cross and outline the levels we’re monitoring in the coming weeks and months.

Here's a daily chart of the EUR/USD going back to the pandemic lows:

After completing a large distribution pattern last September, the EUR/USD pair has been consolidating for the past several months and trading in a range between 1.1483 and 1.1121.

However, as of this writing, it’s undercutting the lower bounds of this continuation pattern and printing fresh 20-month lows. 

A decisive close below the January low of 1.1121 suggests the path of least resistance is lower for the euro. We want to be short against...

Since November, the market has been grinding lower, and most cryptos find themselves in 50%-plus drawdowns.

There's no other way to put it: The altcoins have been bruised and battered.

It's at these stages of the market cycle that we analyze the names in the shallowest drawdowns.

When everything else is down the dumps, the few names that have bucked the selling pressure, and are even pressing against new highs are likely your next leaders when the broad selling subsides.

This is exactly what we've done.

We've filtered our universe of cryptos (all coins above $500M in market cap) by their drawdown from 52-week highs as well as their respective performance from Bitcoin's January lows and since war broke out between Ukraine and Russia.

Here's a snippet of the top 10 strongest names by drawdown from their respective 52-week highs:

You can download the full scan below:

The market has been a mess and off late the geopolitical turmoil has been playing havoc as well. Metals have shown strength over the past week and that has been our area of focus. This week's long trade comes from the Metals segment.

Let's take a look at the trade for this week!

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.

As investors we get the option.

You can either profit and help your family because of higher energy and commodities costs.

Or you can complain about it.

I've been through enough cycles at this point, that there will always be that group who just complains and complains.

But for those of you who are proactive, and took advantage of the trends in place, then there's really nothing to complain about.

To the contrary, these are great days! Some of the best days, in fact.

It's funny, because you have those people who bought into that scam of so called "passive" investing. It's ridiculous that some investors still fall for that old trap.

Just because you buy and hold major indexes doesn't make you a "passive" investor. You have to be really really really bad at math to believe that.

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 $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.

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 $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...