Regardless of the time frame, we continue to see leadership and relative strength from energy stocks.
Outside of utilities, it is the only sector flaunting positive returns on a year-to-date basis.
Even over the past several weeks, with the broader market coming under increasing pressure, energy stands out as the most resilient group.
When we look at the structural trend for energy stocks, this makes a lot more sense.
While most sectors and indexes are facing downward sloping or sideways 200-day moving averages, indicating that the path of least resistance is lower, energy stocks remain in a strong primary uptrend.
While the corrective action of the past few days has not left energy unscathed, the Energy Sector SPDR $XLE remains above our risk level of 79.
As long as this is the case, the bias is higher for energy, and we want to be looking for the strongest stocks to buy as a way to express our bullish thesis.
As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!
One way we're doing this is by identifying 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.
With the rise in $VIX (the "fear gauge") over the past several trading days continuing to persist, we've been on the hunt for options premium selling opportunities. Higher volatility environments lend themselves to better opportunities for premium sellers who can manage their risks and size their positions conservatively.
As such, we're going to sell some premium in the banking sector to take advantage of elevated premiums and what appears to be a high likelihood of continuing sideways action.
One of the hallmarks that's defined crypto is its sheer innovative and scalable nature.
Blockchains are bringing tremendous benefits to traditional industries; self-sovereignty of massive sums of capital, incredibly efficient payment methods, digital collectibles, play-to-earn, and decentralization are all great examples.
Perhaps one of the more overlooked outcomes of this asset class blossoming is the promotion of finance among disenfranchised youth.
These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.
This month’s Video Conference Call will be held on Tuesday September 6th @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.
We look at a lot of charts. And believe it or not, many of them are absolute messes. Sideways, choppy, and trendless describe most markets right now.
It’s just a fact.
But we always find those big bases and tight continuation patterns on the verge of breaking out that keep us turning on our computers every morning. And the market I want to share with you today has both!
Currency markets have provided stellar trading opportunities this year.
It isn't always this way.
Last year was rough. False breakouts and whipsaws were the norm, as most forex pairs and crosses chopped sideways in trendless ranges.
Many of those consolidations have now resolved, as currency markets have begun to trend again. And it’s hard to find a stronger primary trend to bet against than the declining Japanese yen.
We’ve written about the yen multiple times in the past few months, pointing out that The Yen Provides the Base and joking that we could profit by simply buying Anything in Yen.
Today, we’ll follow up by outlining three tactical setups to bet on further yen weakness.
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.
We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.
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.
