One of the many amazing things about public markets is that price is the final arbiter of truth.
They come to you with a credit crisis that will be here any day now. The fairy tales about recessions won't stop. The president will ruin everything. And a war in the middle east is something they pretend is only happening now, and isn't always happening...
Yet the line keeps going up.
The Dow Jones Industrial Average, S&P500 (equally-weighted), New York Stock Exchange Composite and many other measures of U.S. equities are hitting new all-time highs.
More importantly, the list of stocks going up in price keeps getting longer, not shorter.
The number of sectors and industry groups participating to the upside continues to increase, not decrease.
More countries around the world are going up in price, not fewer.
The lines are up and to the right fam.
And this chart below just might be the best way I've seen to measure that yes, in fact, the lines are going up.
What we're doing here is looking at the % of stocks in the S&P500 that are above important prior highs from the past several cycles.
Here's this week's crypto roundup. It's an opportunity for us to take a step back, set aside the distractions, and delve into the key charts shaping the crypto complex.
Recently, I've flipped to a higher conviction bullish view. I'm of the belief this last leg lower purged a great deal of longs from the futures market, of which provides us fertile grounds to build a new trend.
In the short-term, I still think the crypto market will be messier for longer even as Bitcoin rallies to new highs.
Ethereum and the S&P 500 are both running up to a logical level of resistance.
Investors continue to be rewarded for owning Real Estate stocks.
Over 90% of Real Estate stocks in the S&P 500 are above their 50-day and 200-day moving averages.
Earlier this month, we wrote about the best setups in the Real Estate Sector, and 9 out of the 10 trade ideas have been profitable.
The market's message could not be clearer... buy more real estate!
Because of this, we were extra excited about a new name on our Freshly Squeezed list this week.
Short sellers have piled into Douglas Emmett $DEI, a $2.7B Office REIT company, and we're betting they're about to be forced to unwind their positions, causing an epic squeeze.
Before we get into it, let's talk about what we're doing here.
Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions.
When a stock is shorted, it means incremental buyers are waiting in the wings to close out their bearish bets.
We love this, as new buyers are the one true catalyst for higher prices.
Hey everyone. If you caught our livestream this afternoon at the close, you saw the earnings trade I put on for $NVDA using options.
If you didn't watch us live, then you missed the trade, and it's too late now. No biggie. You can skip the rest of the note.
If you did watch, and either you're watching from the sidelines and interested in how it plays out, or you did take the trade, read on. We'll discuss how I'm going to handle the exit tomorrow morning.
As a reminder, this afternoon, we put on a put ratio spread (1 x 2) in $NVDA Aug 30 (weekly) options. We sold short one 125 put and purchased two 115 puts for a net credit of $1.15, right at the last minute before the closing bell.
In this scan, we look to identify 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.
All eyes on Technology today, with $NVDA reporting earnings later this afternoon.
But I'd like to add some different perspective than what you might here on twitter or perhaps on these basic cable networks that no one watches anymore.
There's a reason people keep coming to us for answers.
First of all, let's keep in mind where Technology even is relative to where it's been.
This underperformance we've seen from Large-cap Tech started as soon as it hit the March 2000 highs relative to the S&P500.
It took Technology over 24 years just to get back to where it was at the peak of the dot com bubble.
And that's where we sit today (they won't show you this chart on basic cable):
