We debuted a new scan recently- The Outperformers.
The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.
Expert technical analysis of financial markets by JC Parets
We debuted a new scan recently- The Outperformers.
The Outperformers is our newest scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for major moves.
by Louis Sykes
From the desk of Steve Strazza @sstrazza
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 absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
While the same themes we’ve laid out in previous reports continue to hold strong, we have seen some recent deterioration, particularly in the large-cap sectors and indexes.
Despite an increase in bearish developments, the overall weight of the evidence is still firmly in the bull camp, and we remain aggressive buyers of stocks and risk assets, particularly over any longer-term timeframe.
It is also very important to consider the recent volatility within the context of the primary trend… which is still unequivocally higher in EVERY major US Index.
Over the upcoming weeks, our view is that many of the recent leaders are likely to consolidate at logical resistance levels. So expect some chop. Be ready for whipsaws, and plan your trades accordingly to avoid being shaken out. Position size accordingly and exercise caution.
BUT! Most importantly, be prepared and watch the market closely as this could turn into something more serious, in which case we want to be sure to respect our risk levels and get out if and when they are violated. We put a lot of thought into making sure we always know when and where we are wrong and providing these levels to clients.
The market has been moving sideways for two months now. But that does not mean that every sector will reflect the same move.
As the story of a market cycle unfolds, various sectors assume importance just like different characters in a play. Currently, the Chemicals segment is in the spotlight so let’s see what its constituents are up to!
From the desk of Steve Strazza @Sstrazza
In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: “The Minor Leaguers.”
We write a post every other week where we outline some of our favorite setups from this universe of stocks.
We’ve already had some great trades come out of this column and couldn’t be happier about the early feedback.
Moving forward, we’ll be rotating this column with “Under The Hood” each week.
In order to make it onto our Minor League list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort the stocks by their percentage from new highs. Easy done.
The idea is to catch the strongest names while they’re still small and have serious upside potential. If any of these stocks ever climb up the ranks to the big-leagues, just imagine the returns. We’re looking at 5-10x moves just to break into large-cap status!
And what better time than now to launch a small-cap focused column? We’ve seen very strong evidence of a structural rotation down the market cap scale, suggesting a new period of outperformance from small-caps in the coming months and quarters.
This column is a great way to take advantage of that trend.
Let’s dive in and check out this week’s list of the hottest stocks in the Minor Leagues.
From the desk of Steve Strazza @Sstrazza
Welcome to the 2 to 100 Club.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying 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.
Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, and Salesforce, to a myriad of others… all would have been on this list at some point during their journey to becoming the market behemoths they are today.
When you look at the stocks in our table you will notice we are only focused on technology and growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc
Then like any good technician, we filter the list down to those that are closest to new 52-week highs. This allows the cream of these strongest groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
Markets across the globe have been taking a breather as the momentum cools off. Taking a closer look back home, the indices have been largely choppy and have consolidated over the past two months.
Is this merely a consolidation? Or are we looking at a minor correction ahead? Let’s take a look at what the charts have to say.
by Louis Sykes
From the desk of Steve Strazza @sstrazza
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 absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
We continue to reiterate the same themes and pillars that support our bullish macro thesis. This would include an abundance of evidence pointing to risk appetite, rising developed market yields, strength from commodities, and of course the ongoing rotation toward cyclicals, value, and international stocks, among others…
Just about anywhere we look, we’re seeing investors gravitate further and further out on the risk spectrum.
At the same time, some of the former market leaders have retreated since February and are currently hovering near key levels. Similarly, even the markets’ more recent leaders have shown signs of weakness the past few weeks as some have violated critical tactical levels while others are consolidating at logical levels of resistance.
We’re seeing this both in the US and abroad… and not just in Equity Markets, but also Credit and Commodities. Even many of the risk-on FX pairs we watch have rallied back to key former highs, a very natural area to see sellers step in.
In this week’s report, we highlight some of the most important charts and corresponding levels we’re currently focused on. As long as our risk levels remain intact, so does our “bullish risk-assets” thesis. On the other hand, if we start to see more and more of these key levels give out, we’ll have to re-evaluate things.
How often have we heard that sector rotation is the lifeblood of a bull market? Too often! And there’s a reason why it’s necessary to repeat this statement. At different stages of a cycle, varied variables are at play. This means that every sector will not move in a uniform manner.
Over the past three months, IT has been consolidating as other sectors took the lead. With sector rotation at play, it seems like IT is back in the mix.