The new high list on any given day has been unremarkable of late. So far in 2021, the most S&P 500 stocks making new highs on any given day has been 135 (27% of the index). The average for 2021 is closer to 50. Despite these lackluster daily readings more than half of the stocks in the S&P 500 have made new highs at some point in the past two weeks. Continued expansion in the number of stocks that have been making new highs reflects healthy broad market support.
We laid out our thesis and the key level we're watching to potentially prove it wrong... That is and has been 1.70 in the Russell Large Cap Growth vs Value ratio.
Once again this month, I’m going to share info on positions that were closed or managed in the month of April. As a reminder, our exit plans are always laid out ahead of time in each trade idea we publish. In every case, the exits mentioned below were all exited in accordance with the plan as laid out.
As we head towards May expiration, we only have one position remaining with May options.
It's been well documented that Gold is the biggest loser of the Commodity space. Every single commodity is doing well in this environment except for Gold.
Perhaps this proves what many people have been telling me my whole career, "Gold is a currency JC, not a commodity!"
And maybe that's true. Who am I to judge?
But if you do consider it a currency, it's still one of the ones no wants this year:
You always hear me talking about how we shouldn't look at Monthly Candlesticks (or any candlestick) until it's completed.
In other words, don't draw conclusions about Weekly candlesticks on Tuesday. Don't make decisions based on Daily candlesticks at 10:30AM. And most certainly do not dissect a monthly candlestick early in the month.
BUT, I have a wedding to go to tomorrow and leaving the house around 2 o'clock, a couple hours before markets close for the month of April.
You no there's no way I can wait until I get back on Sunday to take a peek. Let's be serious. It's like Christmas for me every month when I get to unwrap all the new monthly charts.
My grandfather always wanted to drive the length of the Alaska Highway.
One summer, when he and my grandmother were approaching 70, Paul & Doris bought a Ford diesel pick-up truck, installed a camper in the bed, and headed West from their suburban Washington, DC home in pursuit of adventure.
They made the journey in one piece. It was, by all accounts, the trip of a lifetime. I have a photo from that trip that I just love. It's the two of them sitting on a log with a lake in the background, surrounded by the Alaskan summer in all its glory. They are vibrant, robust and full of life.
One of the most anticipated moves that market participants have been waiting for, is a rally in the Commodities space. We had seen some signs of this in December '20-January '21, but those moves didn't sustain. On the contrary, the base metals moved below their resistances and consolidated for two months.
Aluminum was the lone star in this group that continued to power through, despite the overall weakness that was prevalent in this sector.
This was a major reason why we continued to hold out for a rally in the base metals- Relative Strength. Aluminum was displaying relative strength against the rest of the metals. Had it been a scenario of overall weakness, Aluminum would be moving south as well.
We've noticed a pick-up in activity in the same names that were correcting/consolidating and thought this is as good a time as ever, for an update!
The market hasn’t had to cope with disappointing news
Increased confidence raises the expectations bar
Rising yields & growth hiccups offer a challenge
The S&P 500 has benefitted from an unprecedented string of good news. The economic surprise index has been positive since June (the longest continuous streak on record) and for most of that time has been accompanied by a rising earnings revision trend. Since 2003, this combination of positive economic surprises and rising earnings revisions have occurred less than 30% of the time. But in that environment, the S&P 500 has risen at a 20% annual rate, versus an overall annualized gain of 8.7% since January 2003.
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.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying 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.
The ASC team has been writing a lot recently about how markets are looking a bit "messy" right now. This isn't a bullish or bearish declaration, it's just an indication that many of the recent moves we've seen are likely to hit into some consolidation.
And as an options traders, the word "consolidation" should trigger thoughts of delta neutral credit spreads.
With this in mind, I've identified a good short strangle candidate.
