From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Welcome to The Junior International Hall of Famers.
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-listed international stocks, or ADRs.
This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.
Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
Let's dive right in and check out what these future big boys are up to.
This is our Junior International Hall of Famers list:
The most important groups of stocks are stuck below overhead supply.
That's not usually a characteristic of strong uptrends where investors are consistently rewarded for owning stocks. That was the first half of this year.
Today, it's almost the exact opposite.
In this type of environment, investors are rewarded for selling volatility and collecting income. Investors also tend to be rewarded for avoiding these types of sectors and looking for opportunities elsewhere, in less correlated areas.
Here are 4 of the most important groups of stocks all stuck below their prior cycle's peaks:
Major global currencies, including the Australian dollar, the New Zealand dollar, the Japanese yen, the Canadian dollar, and the Singapore dollar, are limping lower against the greenback.
The long list could grow in coming sessions as momentum builds behind a sustained USD advance.
While the evidence suggests we lean in that direction, I always prepare to take the other side of a trade if and when the data changes.
So, what’s the best way to play a falling dollar?
Before I share my favorite trade setup, let’s look at the US Dollar Index $DXY:
DXY is finding resistance at the July pivot highs and a downtrend line originating with the March peak.
At the risk of sounding like a broken record, I'm continuing my theme of the past week of looking for opportunities to sell premium in mostly delta-neutral options trades.
"Delta-neutral" basically means I'm looking to collect income in sideways consolidations while the broader markets sort out this current correction.
Not only is this a good tactical bet for sideways, sloppy, and messy markets, but it also provides nice portfolio diversification if you have a book of long positions like I do.
We've got a well-known mega-cap stock to use as our vehicle today, so let's get to it.
The longer I’ve been in this business of trading, the more I’ve come to realize that “get better at smarter trading” is not the answer to the question: “How do I make more money as a Trader?”
Yes, we can all be better at regime detection, trade selection, strategy selection, optimal position sizing, risk management, and profits management. There will never not be room for improvement in these realms.
However, to me, the real answer lies somewhere off the charts. Away from the screens. Outside of our office or wherever we get work done.
The answer is located someplace closer to where we unwind. Where we exercise. Where we meditate. Where we reconnect with the important people and places in our lives. Where we rejuvenate our souls.
It’s becoming all too clear to me that one of the keys to optimal performance is to make sure our bodies and minds are right. And that ain’t gonna happen while hunched over a computer screen or mobile device.
Welcome back to Under the Hood, where we'll cover all the action for the week ended August 18, 2023. This report is published bi-weekly and rotated with The Minor Leaguers.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names.
There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.
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.
