With stock market investors looking every which way at different market-moving headlines today, let's take a step back and talk about what's really important.
We just got monthly candles. It's time to zoom out.
And when we do, is there a chart more important than the US Dollar Index $DXY right now?
The dollar has had a very strong inverse correlation with stocks and other risk assets for several years now.
Equities have done well for the past two years while the dollar has been rangebound.
Just imagine how they'll do if DXY breaks down from its current range:
This is the question investors should be asking themselves right now.
Instead of worrying about the war in the Middle East or the longshoremen and dockworkers striking…
The real question that matters for all our portfolios, not just today but over longer timeframes, is whetherDXY digs in at this support level or breaks down.
If it's the former, look for today's corrective action to have some legs.
If it's the latter, we should be buying this dip aggressively.
Despite the recent volatility, gold continues its steady ascent, unaffected by the broader market noise.
As seasonals have shifted and new leadership has come and gone this year, gold remains resilient, moving through market regimes with ease.
Whether stocks rally or risk-off sentiment prevails, gold thrives. The yellow metal has been red-hot all year.
In these times, the saying goes, "there is no fever like gold fever."
But, is there any evidence of this kind of euphoria among investors yet?
While the COT report suggests sentiment may be overstretched, let’s talk about what we’re seeing on the ground.
There’s little buzz about gold in the financial media. No bold predictions of $10K gold on magazine covers, no headlines touting it as the ultimate safe haven in an impending crisis—signals that often show up at market tops. We’re just not seeing it.
For context, in 2011, fears of currency depreciation were rampant. The covers of TIME magazine and Smart Money allow us to remember this moment. They came right at the top.
We've seen a bit of a rise in volatility this week, and while it is not something that should be ignored or scoffed at, I do think it offers us options traders an opportunity to position for some volatility mean-reversion, especially in some big-cap names that are stuck in ranges, ideally tightening ones.
Today's trade is in a well-known name that already has earnings out of the way and fits the bill for some continued sideways action.
In this scan, we look to identify 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 their journey to becoming the market behemoths they are today.
When you look at the stocks in our table, you'll notice we're only focused on Technology and Growth industry groups such as Software, Semiconductors, Online...
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On today's Flow Show, Steve Strazza and I discuss this morning's frustrating start to Q4, and whether or not it means anything.
A 20%+ rise in $VIX is not something that should be ignored. But is the market overreacting to today's down tape and is this just related to repositioning in a new month and quarter?
Regardless, we've got a stock on our radar today that is caught up a bit in the news cycle, has a lot of traders caught in short positions, and could be ripe for an epic squeeze if the stock can get out from under a declining Anchored VWAP.
Here's a chart of ZIM Integrated Shipping Services:
17% of the outstanding shares for $ZIM are held in short positions. The only way these shorts can stop the bleeding in their accounts is to cover their position by buying stock. And if everyone heads to the exits at the same time, that could propel the stock significantly hired. We've seen it happen before. So we're playing for that possibility, while mindful of the fact that we may run into some near-term resistance by an overhead AVWAP. Watch the video above to see it and how that factors into our thinking. Here's the Play...