From the desk of Steve Strazza @Sstrazza

Monday night we held our July Mid-Month Conference Call, which ASC Premium Members can review here.

In this post, we’ll summarize the call by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

This is the video recording of the July 21, 2022, Weekly Town Hall w/ Willie Delwiche.

07/21/22 2:00 PM ET

From the desk of Willie Delwiche.

The world is an uncertain place. 

But that doesn’t make it altogether random. Trends persist – right up until the point that they don’t. If we’re going to move beyond irrefutable narratives and successfully navigate reality, we need to develop feedback mechanisms that can keep us on the right path (and get us back on the path when we stumble into the weeds). 

Operating in the world as it is and not as we would like it to be requires an ability to test viewpoints, an awareness that sometimes the ground shifts beneath our feet and a willingness to consider scenarios from both directions.  

From the Desk of Louis Sykes

Whenever we have any discussion about approaching this market from the long side, we're quickly stumped.

In the current tape, there's just so much supply to work through that there's no reason for getting overly bullish on meaningful time frames.

Go back and look at these infamous retests of supply zones; they are no joke.

Don't be smart money's exit liquidity. At the very least, we want to err on the patient side of things until this supply eventually gets eaten through in some capacity.

A big difference that often differentiates mediocre traders from good ones is the ability to sit tight, wait for a setup to form, and follow the money flow into a position.

We've adjusted a position in the Paid-to-Play portfolio today:

The largest insider transaction on today’s Hot List is a Form 4 filing by Nimish P. Shah, who reported an additional purchase of roughly $1.4 million of Tricida $TCDA.

The only 13D on our list today was filed by Baker Bros Advisors LP.

One thing we know about markets is that breadth thrusts tend to cluster together near the beginning of new bull markets.

Breadth thrusts are NOT signs of exhaustion. They are evidence of new trends emerging.

Now, after a few days of strength in stocks and crypto, investors are wondering: Was that a thrust?

Well, almost. But it's not quite there yet.

Here's one that's close. We're looking at the % of stocks in the S&P500 making new 20 day highs.

We saw over 40% of stocks hit new 20 day highs this week. We're looking for 55% to categorize this one as a true breadth thrust:

For this week's trade, we're selling $GIS September 72.50 puts for an approximately $1.85 credit.

Get the full details, risk management procedures and targets for this trade here:

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 their journey...

There are many examples of important Indexes and Sector ETFs that are retesting key former highs, the 2018 peak in particular.

You can see it in Small-caps, Financials, European Indices, Bitcoin/Ethereum and many others. We discussed all of these on this week's live Premium Conference Call, and also in our Q3 Playbook to Profit.

But you can also see these important retests in the bellwethers.

Here are two of the most important on the planet, one representing Industrials and the other Financials - 2 key sectors in America.

From the desk of Willie Delwiche.

Key Takeaway:  It’s been bears on parade all year, starting with significantly less optimism coming into this year than was seen at the beginning of 2021 or 2020 and continuing through lengthy stretches of more bears than bulls on both the II and AAII surveys. Persistent pessimism among advisory services has now been broken and it’s time for the bulls to show what they’ve got left in their tank. The clock is ticking, though, as they’ve used so much of their limited firepower and yet we continue to see more stocks making new 52-week lows than 52-week highs. Bulls have put together two days of better than nine-to-one upside volume (on July 15 and again on July 19). That checks off one box (out of five) on our bull market re-birth checklist, but there is more work to be done before concluding that any uptick in optimism is well-placed. 

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