We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.
For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.
That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.
We expanded our universe to include some mid-caps.
To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.
Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.
By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big-picture context and provides insights regarding the structural trends at play.
Let's jump right into it with some of the major takeaways from this week's report:
* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.
In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
They Can’t Break the Banks
Unlike most industry groups, community banks never completed a top, as price has remained above the pivot lows from last year. Additionally, momentum has not reached oversold conditions during the current bear cycle. If this range remains intact, the world isn't coming to an end any time soon.
The new low list peaked in May and the new high list bottomed in July. Despite this, we’ve had more new lows than new highs in 44 of the past 46 weeks.
The Details: More than 4400 stocks (48% of the total on the NYSE + NASDAQ) made new lows in May. That was the most since March 2020. The new low list has ebbed and flowed since then but has not surpassed that peak. The 116 stocks (just 1% of NYSE + NASDAQ total) that made new highs in the first week of July was the fewest since April 2020. Last week 357 stocks (4%) made new highs and 1645 (18%) made new lows.
I dunno why, but thinking about train tracks and rail stocks got me thinking of Blue Steel. There is absolutely no connection between today's trade and the pose made famous by the Zoolander film. But, you're welcome.
That's it -- that's the post. There's nothing to discuss.
Bitcoin and the rest of the asset class are still a choppy mess. There's no conviction in taking longs until price action can shape up in a more bullish manner.
Given the lackluster market conditions, this letter will act as yet another brief interim update.
