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.
Silver is underperforming Gold. The corrections in Platinum and Palladium are burrowing deeper beneath our breakout levels. And the Gold Miners ETF $GDX is printing fresh lows versus the broader market.
In today's episode of the Flow Show, Steve and I navigate some trade ideas that would help add bearish portfolio diversification in case the stock market wants to catch its breath this summer.
We discussed two specifically ugly charts, and we both agreed that Block Inc $SQ offers the best opportunity as an options trade.
On Friday you saw the highest weekly close for the S&P500 in history.
Do you know how many stocks on the entire NYSE closed at a new 52-week high?
12.
Meanwhile in ETF land, the Nasdaq100 $QQQ and S&P500 $SPY hit new all-time highs on Friday, but we also saw fresh 6-week lows for the NYSE Advance-Decline line. It was also a new 6-month low for the Nasdaq Advance-Decline line, for those keeping score at home.
Here's a chart of all the S&P Sectors on an equally-weighted basis over the past 15 weeks. Consumer Discretionary has been the worst. Utilities have been the best by far.
You'll notice that the Equally-weighted S&P500 and Nasdaq100 have made no progress or are down during this period.
I’m avoiding the US dollar and interest rate chopfest.
That includes interest rate-sensitive commodities like crude, copper, and gold.
So, let’s check in with a commodity group that walks to the beat of its own drum…
The New York City Softs: Cocoa, Coffee, Cotton, and Sugar.
First up, Cocoa.
I’m sure you’ve seen Cocoa’s 45-year base breakout to new all-time highs:
Cocoa futures have been the main attraction, showcasing a face-ripping rally reminiscent of the 1970s.
In the 70s, Cocoa experienced two 400-plus rallies, each spanning approximately two years trough-to-peak (December ‘71 to April ‘74 and June ‘75 to August ‘77).
Cocoa might have another explosive rally in the tank!
For now, it’s bouncing between two critical extension levels:
Our Hall of Famers list is composed of the 150 largest US-based stocks.
These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Crowdstrike and Arista Networks.
It has all the big names and more.
It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.
The Hall of Famers is simple.
We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.
Let’s dive right in and check out what these big boys are up to.
We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.
However, when it comes to this one, it couldn't be any simpler!
With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.
Welcome to The Junior Hall of Famers.
This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.
The Nasdaq is ripping to new all-time highs. NVIDIA’s market cap is surpassing the three-trillion-dollar mark. And US T-bonds are registering another buy signal.
But the market’s still a mess.
Just look at yesterday’s intraday reversal—a bullish reaction to inflation data in the morning, followed by a bearish reaction to the FOMC meeting in the afternoon. Investors are still trying to make sense of the mid-week hoopla.
Friday’s close (the most important data point of the week) will reveal critical information regarding market conviction heading into the weekend.
Meanwhile, you can track high-yield bonds for risk-on confirmation.
Check out the HY Bond ETF $HYG overlaid with the high beta-versus-low volatility ratio (using the $SPHB and $SPLV ETFs):
