The bullish trend in the market continues as more and more sectors and subsets join the rally. We have maintained our bullish stance on the Financial Services sector for quite some time but we thought we should dig a little deeper this time. Today we decided to look at a subset that has been performing well and could witness greater returns in the weeks and months ahead - Insurance.

From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.

The major indexes continue to hold important levels and many large-cap sectors have laid the foundation for upside resolutions and another leg higher in their relative leadership. 

SMIDs and Micro-Caps have had every chance to digest their recent gains, but we're yet to see that play out. Seeing such strong upward momentum from these stocks speaks to the healthy risk appetite we continue to point out.

FICC markets are also assigning stocks with a clean bill of health and supporting/confirming a continuance of their primary uptrends.

Let's jump right into this week's report with our US index table.

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From the desk of Steve Strazza @Sstrazza.

Welcome to our “Under The Hood” column for the week ending December 25, 2020.

What we do is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.

The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.

As the major indexes continue to trade at or near record highs, we continue to...

As January gets under way, it’s time to review positions with January options that remain open (haven’t already hit profit targets or been stopped out). I'm getting started a little earlier this month because January expiration is on the 15th, and we're currently only 18 days until expiration. I don't want to wait through another long weekend before taking action. That's cutting it too close to expiration for my taste.

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

Wow, after a few months in a row of not much to worry about heading into expiration, this month will keep us busy. At the time of this writing, I've got 5 positions that need continued monitoring (thankfully they are profitable) and a few that need to be closed now.

The rest have already hit our profit targets or stop loss levels. In...

From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts

New Mystery Chart!

For those new to this exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

From the desk of Louis Sykes @haumicharts

Seeing as the year is coming to a close, here's a short list of some lessons I'm taking away from this hectic 2020:

1. I know a lot less than I what think I do.
    
2. Relative strength is a lot more important than what I thought it was. People who followed relative strength in 2020 were the big winners. Seeing those names keeping their heads above water in March lead markets higher.
    
3. To not be scared of new highs and the danger of the attitude that something's "gone too far too fast". Where do you draw the line on whether something's gone too far? 20%, 50%, 100%? These are emotional levels, not rational ones.
    
4. You're never chasing if you're buying a breakout.
    
5. Don't try to be smarter than what I really am. Popular momentum names were continually showing up in my scans, but I refused to buy them. Instead, I was looking at names that didn't have as much coverage thinking it made me somehow intellectually superior (spoiler, it...

From the desk of Steve Strazza @Sstrazza.

We recently held December’s Monthly Conference Call which our Premium Members can access and rewatch here.

In this post, we’ll provide a summary of the call by highlighting 5 of the most important charts/topics we covered along with commentary on each.

Let’s dive into it.

This week we're looking at a long setup in the IT sector that is witnessing a good move. 

We retired our "Five Bull Market Barometers" in mid-July 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.

"JC, how can you be buying stocks up here?"

"JC, stocks are overvalued"

"JC, stocks have gone too far too fast"

"JC, aren't we due for a correction?"

I've heard some version of this every single day since the Spring.

These are the types of questions that come my way during bull markets. I don't get them when stocks are in downtrends, that's for sure. Different types of questions come in those environments (How low can we go? Aren't we due for a bounce? etc)

It's a new year right? The holidays are over. Make your donations, help whichever causes are most important to you, and now dedicate a little bit of selfish time to improve your own life.

Social Media can be a very valuable tool. It can also lead to frustration, misallocation of time & energy, and in many cases even depression.

Unfortunately these days, I hear more negativity about social media than I hear positive things. But that's not the platform's fault. It's your fault. We curate our own streams. We decide what we want to read and who we want to follow and interact with.

If your social media experience is causing you anxiety, then you're doing it wrong.

If your social media experience is anything other than inspiring, educational and rewarding, then you're doing it wrong.

If you find yourself constantly getting angry at something you read or someone you follow, then you're doing it wrong.

If you're not learning every day from the people you follow, you're doing it wrong.

Social Media should be a very selfish endeavor. We're here to help ourselves and we're here to help others. If anything else is...

We held our December Monthly Conference Call on 22nd which our Premium Members can access and rewatch here.

In this post, we'll share five of the most important charts along with JC's commentary of them and a brief explanation for each.