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.
Our Top 10 Charts Report was just published. In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.
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.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades. What remains is a list of stocks that large financial institutions are putting big money behind… and they’re doing so for one reason only: because they think the stock is about to move in their direction and make them a pretty penny.
Welcome back to our latest "Under The Hood" column, where we'll cover all the action for the week ended October 1, 2021. This report is published bi-weekly and rotated with our "Minor Leaguers" column.
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.
If one were to simply observe the daily charts for $SPY or $QQQ while listening to the teevee, one would easily conclude the sky is falling. And that would be an easy conclusion to come to.
But when we take a step back from the noise and look elsewhere, the details under the hood are suggesting a different story. And that is giving me some confidence to fade the hysteria here.
Key Takeaway: Price volatility fueling sentiment reset. Indexes under pressure as the tide turns against their largest components. Positive breadth divergences lacking.
Higher rates are fueling strength in Energy and Financials - leadership from those sectors can be seen across market cap levels.
Our industry group heat map shows continued deterioration from large-cap groups and improvement from small-cap groups. Some 8% of large-cap groups made new 13-week highs last week vs 42% that made new 13-week lows. Among small-cap groups, it was 17% at new highs and only 13% at new lows.
There aren’t many coins breaking out to all-time highs right now, but AXS is one of them.
We just had to break the rules with this one – it’s currently trading at a tiny market cap of $750M, so it’s $250M shy of joining our Crypto universe. So keep in mind that this one is much smaller than what we typically deal with.
This week we’re looking at a long setup in the Infrastructure sector. Nifty Infra continues to display strength across different time frames. One of the stocks that stands out from this sector has been featured here.
We retired our "Five Bull Market Barometers" in mid-July last year 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.