In Bull Markets we see more stocks making new highs.
That's just math right?
And when we talk about new highs, you'll often hear people discussing the new 52-week high list.
Until recently, this list was almost non-existent.
So while there's definitely a ton of more action there, we should really be seeing an expansion in new 1-month highs and new 3-month highs.
Crawl before you walk.
If this stock market rally has legs, more new highs is just mathematically necessary for that to occur.
It's a market of stocks.
Here's the 3-month high list on the New York Stock Exchange. An expansion in upside participation will go a long way in proving that, yes, in fact the path of least resistance is higher:
It's hard not to notice the strength we've been seeing in the metals space lately. This surely is getting the Gold Bugs excited.
We wouldn't consider ourselves any kind of "bug," but it's fair to say we're biased toward charts that trend. If line goes up, we like to buy. If line goes down, we like to sell. Simple.
If we can get into an emerging trend early -- so much the better!
"Poor man's gold" (as JC called it), might just be starting a big relative outperformance trend that could spell a big opportunity for us.
Don't listen to people who claim to know the future.
They're all full of shit.
Technical analysis isn't a mystical prediction machine. This is nothing but a simple, repeatable, and foolproof process for managing risk.
Whenever we're looking to buy a stock, a cryptocurrency, or any other publicly traded asset, we always prioritize where we're wrong rather than how much money we could make.
If you haven't learned by now that risk management is paramount when managing money, you're beyond saving at this point.
Contrary to popular belief, I don't know what the market is going to do next.
I have no way of possibly knowing if the S&P500 is going to double from here or if it's going to get cut in half. Gold can go to $5000/oz or $5/oz. Crude Oil can go to $250/barrel or $2. I just don't know.
We all have our 'opinions', sure. I mean, how can we not? We're humans right?
But we're making decisions with unknown information.
Focusing our attention on buying stocks over the past 5-6 months has paid very well. This is especially true in the stocks that have been showing the most relative strength this year.
The laggards remain laggards. The losers are mostly still losers.
The breadth improvement, however, remains in place.
Rotation overseas continues to broaden.
It's gotten harder and harder to make money from the short side since this Summer.
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, a company must have a market cap between $1 and $4B.
From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts
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.
Let me ask you this: In bear markets does it historically get easier and easier to find stocks making new all-time highs?
Where I grew up, new all-time highs, yet alone more and more of them every day, are not something that we normally see in bear markets.
And here we are. I can't remember the last time it was this easy to find stocks breaking out to new highs. And not just new 3-month highs or even 52-week highs.
Stocks are breaking out to new ALL-TIME Highs.
And not just in one or two sectors.
We're seeing it in Financials, Industrials, Technology, Energy, Healthcare, Staples, Telecom and more.
