We debuted a new scan recently which goes by the name- All Star Momentum.
All Star Momentum is a brand new scan that guides us towards the very best stocks in the market. We have incorporated our stock universe of Nifty 500 as the base this time around. Among the 500 stocks that we follow, this scan will pump out names that are most likely to outperform the market.
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.
Key Takeaway: There is plenty of talk about investors turning fearful. This is reflected in more bears than bulls on the various sentiment surveys and high demand for puts relative to calls (though this is being distorted by the collapse in call option activity). But from a longer-term perspective, risks to the equity market remain elevated. Stocks are still historically expensive and overowned. Updated data from the Fed this week will clarify how (if at all) the household asset allocation mix shifted in Q1 after finishing 2021 with the highest exposure to stocks versus bonds in history. While the cyclical rise in pessimism may provide enough fuel for bounce attempts and counter-trend rallies, it will be difficult to suggest that a major reset has occurred until stocks are inexpensive and underowned in addition to being unloved.
Sentiment Report Chart of the Week: Equity Exposure Charts A Challenging Path
It's no secret that long-duration assets have been hit the hardest in this bear market, with interest rates on the rise.
Think about growth stocks and the tech junk that peaked in February 2021 -- it's been a painful bleed lower ever since.
But, in recent weeks, even the worst stocks have stopped going down.
And, what's more, they're finding footing at notable levels of interest, whether it's their pre-pandemic highs, their pandemic lows, or their 2018 lows.
It's been a minute since we've put some delta-neutral credit spreads on. And while VIX is off its highest levels of the year, there is still plenty of elevated premium in pockets.
The team here at All Star Charts has been monitoring the elevated options premiums in the Consumer Discretionary space. The $XLY ETF has been persistently hanging around the top of our implied volatility lists for the last couple of months. We talked about it yesterday during the @allstarcharts live twitter spaces chat.
And I like having a few delta-neutral trades on to provide some portfolio balance against my bullish and bearish directional bets in individual stock names. So $XLY is providing us a good opportunity to collect some income.
Phillip Frost, the healthcare industry veteran and CEO of OPKO Health $OPK, is on our list again as he accumulates more shares in the pharmaceutical and diagnostics company.
Yesterday, he revealed an additional purchase of roughly $279,226 worth of his own company's stock in a Form 4.
I lived on 55th Street on the East side of Manhattan for a while.
To get some exercise I would often run along the East River and many times I'd run across the 59th Street Bridge over to Queens Blvd, and back.
It wasn't a long run, but it got me going and would get me away from my screens for a bit.
Exercise was part of my "support" system during some of those rougher years.
On the way out to Queens you go over Roosevelt Island (which is a really weird place btw). And then you have Queensbridge over to your left directly north of the 59th St. Bridge.
For those unfamiliar, Queensbridge is the largest housing project in North America.
It's where Nas is from, arguably the greatest rapper of all time. I personally don't make that argument, but I can see how you could (he's in my top 5).
There's a famous diss track that Nas titled "Ether".
To this day that word is synonymous with ruthlessness and dominating opponents.
From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley
The Japanese yen continues to slide.
In early April, we highlighted the multi-year base in the USD/JPY cross. We were anticipating a significant breakout based on the broad weakness in the yen.
Even gold, one of the worst performing assets, looked strong denominated in yen.
Not long after the post, we got the breakout we expected. And, two months later, the USD/JPY is kicking off its next leg higher, printing fresh 20-year highs.
Let's take it a step further and outline some trade setups in other currencies denominated in yen.
Remember, everything and anything seems to work priced in yen these days.
First, a quick revisit of the USD/JPY chart we shared in April. Here’s the updated version:
This All Star Charts +Plus Monthly Playbook breaks down the investment universe into a series of largely binary decisions and tactical calls. Paired with our Weight of the Evidence Dashboard and our Playbook Chartbook, this piece is designed to help active asset allocators follow trends, pursue opportunities, and manage risk.
In Focus for June: We are still waiting for the evidence that the bear market in equities has run its course and a new bull market is being reborn. While the short-term risk environment has improved slightly over the last week or so, the overall environment tilts more toward risk than opportunity and our longer-term risk indicator is still in risk off territory.
Enduring a downtrend is not a prerequisite for participating in the ensuing uptrend. We will practice patience in the batter’s box until the market delivers fatter pitches on a more consistent basis.
