From the desk of Steve Strazza @Sstrazza

In a further effort to identify individual equities that fit within our larger more Macro thesis, we couldn't be happier to roll out and share our latest bottoms-up scan: "The Minor Leaguers."

We'll also be writing a post every other week where we outline some of our favorite setups from the watchlist. This is the first edition.

Moving forward, we'll be rotating this column with "Under The Hood" each week.

In order to make it onto our Minor League list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.

Then, we simply sort the stocks by their percentage from new highs. Easy.

And what better time than now to launch a small-cap focused column!? We've seen very strong evidence of a structural rotation down the market cap scale, suggesting a new period of outperformance from small-caps in recent months/quarters.

This should be a great way to take advantage of that trend. Let's dive right in!

Here...

I'm incredibly fortunate to be able to have regular conversations with many of the top Traders, Analysts, PMs and Financial Advisors in the world.

So many of these friends of mine had their best year ever. Some of my friends absolutely crushed 2020, which is not surprising given their prior success and the increased level of opportunities sparked from spikes in volatility earlier in the year.

So what was the common denominator among the ones who succeeded the most? (because I asked them all)

They told me, each in their own ways, that they shut off the news and just listened to the market. You see, the "news" is designed to be a distraction. The better they are at distracting you from what's actually important, the more their precious sponsors will pay them. That's how that works.

The "news" people are not here to help you. In fact, in many cases,...

The end of a month is more like a celebration at ASC. We sit back, relax, and go through Monthly charts and look out for interesting trends developing across the globe. In our Top-Down Analysis approach, we go through thousands of charts to arrive at a wholesome view of the market.

There were five charts that popped out in particular. We thought of giving you a preview of our Monthly Charts Strategy Session which is scheduled for Tuesday, January 5th at 7PM IST. 

Let's take a look at these charts!

What do you do when an index has clocked a 30 year high? You track it's every move and watch history as it unfolds in front of your eyes. Nikkei 225, which was on our watchlist, has finally moved above 26,900. A strong move would propel the price higher towards its next target of 32,850. This would in-turn have an impact on Japan's Asian peers. For now, let's wait and watch.

Click on chart to enlarge view.

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Here is a list of trade ideas organized by date, ticker symbol and directional bias. Please make sure you have clicked on the link and read the details surrounding the trade before acting upon any of them. Also, make sure you have checked with your financial advisor and tax accountants to make sure you are suitable to be executing what is discussed on this website. The risk management procedures and targets are detailed for each idea. Please read and review the terms and conditions page before making any trades of your own.

Me, JC, Steve, and the rest of the All Star Charts team were casually chatting during our weekly strategy session and Steve asked me: "What was our biggest options winner this year?"

Without a doubt, our best options trade in 2020 was long Peloton $PTON. We entered long October 60 calls in $PTON on June 17 when it was trading below $52 per share. The stock then went on a rocketship ride and touched an all time high north of $139 per share on expiration day Oct 16th, which we rode all the way. It rarely happens that we hold a long calls position all the way into expiration day, but the last 3 weeks saw barely a downtick, so there was never any reason to hit the escape hatch.

As we further discussed this, it hit me and I remarked to the guys that "What's your biggest winner?" is a bit of an unfair question. I don't think 2020 was a good year because of a handful of big winners. They certainly helped, but the real reason why 2020 was so successful was because PROCESS was our big winner.

Oh man this was a lot of fun! Fahmy calls me up and says let's invite everyone to a zoom call and talk about markets and drink Champagne.

Obviously, I said I was in!

We had two questions we were asking,

1) What was the biggest lesson you learned in 2020, and 2) What's your best trade for the first half of 2021?

Next July, whoever ended up picking the best trade gets a donation from us to the charity of their choice, plus I hand select a bottle of champagne and will be sending it over to the winner.

This was a great conversation with a group of really smart people. I'd be taking some notes on this one. There's good stuff in here.

Enjoy!

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, and Salesforce, to a myriad of others… all 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 will notice we are only...

Nifty Infra is pushing up against its long-term resistance. While the index has halted at these levels before, current market rally may lead to a breakout soon, going by the bullish momentum we're seeing in the index.

We've been tracking the cement space, and while earlier there were limited actionable trades, recent buying interest grabbed our attention again. We decided to dig a little deeper and found some actionable ideas.

Let’s take a look at this space and see what the charts have to say.

Nifty Infrastructure is taking another shot at its long-term resistance. With RSI alluding to bullish momentum and price moving higher, we could witness a good move in this sector going forward.

Click on chart to enlarge view.

Since we wanted to focus on Cement stocks, we created an equally weighted custom index dedicated to this space- ASC Cement Index. The custom index has taken support from a level with a lot of...

Since June, we've seen so many different breadth thrusts in the Large-cap Indexes, Small-cap Indexes and even within specific sectors. They keep showing up.

So when you look back historically, these breadth thrusts tend to come near the beginning of strong uptrends, not near the end of them. Go back in history and you'll notice how consistent this is.

So today, I thought I'd share some thoughts from the peanut gallery regarding my comments about this being the beginning of a new bull market, and not the end of one.

Enjoy:

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Monday January 4th @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Tuesday evening:

When assets are in strong uptrends, they tend to not just do well on an absolute basis, but they also outperform their alternatives. In the case of stocks, some good alternatives would be Bonds and Gold. No, not bitcoin.

So with stocks all over the world breaking out to new highs, more and more stocks participating, and even the biggest laggards around the world catching a bid, how are they performing relative to their alternatives?

Well, here is Gold vs the Nasdaq Composite breaking down to new 19-year lows. The trend is strong in this one:

I took a few days off over the holidays. I couldn't tell you the last time I went that long without a chart or a tweet. It felt good.

But you know what felt even better? Getting back to those charts and digging in on what's been going on around the world. It's not work for me. I mean it is, technically. But as you probably already figured out, this is something I really enjoy doing.

So what stood out the most upon my return?

I think it's got to be the victory laps from the bitcoiners on tilt. They're acting like they've never gotten a trade right in their lives. And that's dangerous.

Sure, we're happy bitcoin is doing well. It's already up 35-40% since our latest entry point a few weeks ago. That's great. And remember, this is after it doubled immediately after our last buy point this summer.

So no complaints here. But we don't have to make a big deal about it. This is...