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.
The stock that has made its way to the ToW post this time around is from Bank Nifty. Slowly but surely, more and more constituents are moving higher and breaking out of big bases. Let's take a look at one such name.
Welcome to Under the Hood, where we'll cover all the action for the week ending October 14, 2022. This report is published bi-weekly and rotated with The Minor Leaguers.
What we do here 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.
From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @AlfCharts
This is one of our favorite bottom-up scans: Follow the Flow.
In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish, but not both.
We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients.
Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.
In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
Bonds Lead
First bonds, then stocks, and now commodities have rolled over, following the traditional intermarket cycle. If the pattern holds, we should expect bonds to bottom first and eventually lead the way higher. With yields on the rise, there are no signs of this yet, but even a transition to a sideways trend could bring some stability to other asset classes.
US industry group trends are at a new low for the year and are approaching washed out levels. Take out the Energy groups and virtually nothing is in an up-trend.
The Details: The industry group trend indicator looks at 4 weekly trend metrics for each of the 72 industry groups in the S&P 1500 (24 each for small-caps, mid-caps and large-caps). The higher the number, the broader the strength at the industry group level.
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.
