We retired our "Five Bull Market Barometers" in 2020 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.
Honestly, I was only half serious. I pay attention to the Fed and CPI data – mainly to stay aware of the increased volatility accompanying important release dates.
Different market environments are conducive to certain scans and less so to others.
Coming off this perilous winter, strategies identifying short opportunities have been greatly rewarded. And, throughout the pandemic, it was the complete opposite.
Like we said in yesterday's note, half the battle is in understanding how to directionally position in the underlying trend. The simple fact of that matter is that many have been caught offside betting against names in substantial drawdowns.
Names like Coinbase, Marathon Digital, and, most recently, Silvergate have all sported notable short interest coming off this bear market.
Identifying this skew, we reintroduced our Freshly Squeezed scan. The idea is rather intuitive; we're simply looking for stocks that people are betting against. When a stock is heavily shorted, we know there are incremental buyers waiting in the wings.
As Strazza said in the latest Freshly Squeezed report,
It's the weekly currency edition of What the FICC?
Despite the overarching range-bound action and intraday indecision across the currency markets, I continue to find trade setups with well-defined risks.
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.
