I'm back with a brand new edition of the Louis' Look column to share some lessons I'm learning as an intern. You can find my last post here, where I share a handful of obscure charts most people have never seen.
Let's crack straight into it.
My first year of University is now officially over! Woop Woop!
While celebrations would normally be in order, it's a bitter-sweet ending to my freshman year.
This whole virus situation meant that I only spent a few weeks of the year on campus and in the 'University scene' - a time where you're supposed to leave home, grow out, and meet new and interesting people.
After a massive run in the Nifty Major Indices over the last three weeks, Wednesday we got our first sign of waning enthusiasm and a key inflection point to trade against.
We've been keeping tabs on a stock that we traded successfully earlier this fall. The stock hit our price objective, our spread hit our profit target, and we moved on.
Lo and behold, the stock consolidated around that last price target as we expected, and now after about a month of working through the weak hands, it appears Snap Inc $SNAP is ready to make another run.
Commodities have been an area of opportunity on the long side for months, but today we're taking a look at a few that are at important inflection points.
For those new to this exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!
We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.
You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?
From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the relative strength trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.
Last week, we mentioned we were no longer in a split market, but rather in an environment supported by strong internals and an aggressive appetite for risk assets.
This week, we're preaching much of the same.
We continue to see rotation down the market-cap scale, into Micro-Caps and SMIDS, confirming the strong underlying market internals.
If Semi's are leading, how bad could things be for the stock market?
As you can see in this chart below, not only are Semiconductors outperforming the broader markets, but they are also breaking out relative to Technology stocks as a group.
Welcome to our "Under The Hood" column for the week ending November 20, 2020.
What we do 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.
Whether we're measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers... there is a lot of overlap.
The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we're producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.
We retired our "Five Bull Market Barometers" in mid-July 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.
