From the Desk of Ian Culley @IanCulley
The US Dollar Index $DXY is violating its year-to-date trendline.
Is this it? Will the dollar finally follow the breakdowns in crude oil and interest rates?
The forex markets say, “Not so fast…”
Expert technical analysis of financial markets by JC Parets
by Ian Culley
From the Desk of Ian Culley @IanCulley
The US Dollar Index $DXY is violating its year-to-date trendline.
Is this it? Will the dollar finally follow the breakdowns in crude oil and interest rates?
The forex markets say, “Not so fast…”
by JC
Next week marks the 2-year anniversary of this Bull Market for stocks.
As we’ve mentioned many times, the S&P500 didn’t bottom out until October of 2022. But it was already a bull market at that point.
The bottom for the prior bear market was in June of 2022. That’s when the majority of stocks bottomed.
By the time the S&P500 hit its final low in October, there weren’t many stocks at all left going down. Most of them had already been making higher lows and higher highs.
Coming into this year, we made our list of the most important groups of stocks that were already exceeding the prior cycle’s highs.
The thought process was that if these groups were above their late 2021-early 2022 highs, then any correction in stocks, whether through time or through price, would be just that – only a correction, but within the context of an ongoing bull market.
We called them our “Fab 5”. [Read more…]
by JC
This is the video recording of our June 3rd Monthly Charts Live Strategy Session
From the Desk of Steve Strazza @Sstrazza
Welcome to The Minor Leaguers.
We’ve had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.
For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.
That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.
We expanded our universe to include some mid-caps.
To make the cut for our Minor Leaguers list now, a company must have a market cap between $1 and $4B.
And it doesn’t have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.
The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to focus on the best players.
The goal is to catch the strongest names while they’re small and have serious upside potential. If any of these stocks ever climb the ranks to the big leagues, the returns could be huge.
We’re looking at up to 10x moves just to break into large-cap land!
Let’s dive into this week’s report and see what’s happening in some of the hottest stocks in the Minor Leagues.
by Ian Culley
From the Desk of Ian Culley @IanCulley
This week, I’m cutting straight to our trade ideas.
I’ve made a table of more than 30 setups, the majority of them trending toward our targets.
And I’ll also update a few trade ideas with new entry levels and additional upside objectives.
Let’s dive in!
[Note: We entered this trade on June 4th following the entry trigger. Details below]
On today’s Flow Show, Steve Strazza brought the heat.
It appears Bitcoin is about to start another leg higher. It’s showing all the signs: A tightening consolidation on the verge of an upside resolution. And with the 100,000 level on the watch list of every professional and amateur market speculator, it’s hard to believe that the next bullish breakout does not include a run to and through this highly watched level.
In the meantime, we equities options traders still have limited vehicle choices available to us to participate in this move. We’ve long used Microstrategy $MSTR as a Bitcoin proxy. But our feeling is that if Bitcoin makes the move everyone is waiting for, we will see the entire crypto space go with it, and that will be great news for a stock like Coinbase $COIN.
Here’s where the charts of Bitcoin and $COIN stand now: [Read more…]
by JC
When you look at Consumer Discretionary stocks as a group, you think “Wow this is the worst sector on the planet”.
How can there be any winners coming out of here?
But there are. And there always will be.
First, look at the sector itself relative to the S&P500 going out last month at the lowest levels in over 10 years. [Read more…]
by Sam Gatlin
From the Desk of Steve Strazza @Sstrazza
Despite some messy action from the broader market in recent months, risk appetite remains elevated.
How do we know?
The stocks that investors are betting against the most are making big moves… to the upside.
And we know just what to do in these environments.
We look to our freshly squeezed universe and find the most heavily shorted stocks. We wait for momentum to come into these names, and we ride them higher while the shorts get squeezed.
We got new short data recently, so let’s talk about how we’re playing it.