From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the two weeks ended July 7, 2024. This report is published bi-weekly, in rotation 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.

Click here for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual...

From the Desk of Ian Culley @IanCulley

The talking heads are forecasting choppy market conditions and a significant correction for Q3.

News flash: The market has been messy for months. And we already experienced a stealth correction beneath the surface.

I’ll keep an open mind, but if commodity currencies start breaking out…

Forget about it!

Stocks have weathered the US dollar’s recent rally. 

Imagine how they’ll perform once the dollar rolls over, especially against risk-on currencies like the New Zealand dollar.

Check out the NSD/USD pair coiling within a symmetrical triangle after retesting its 2020 low:

I’m not a fan of symmetrical triangles, as I’ve found measuring risk with diagonal boundaries far less reliable than horizontal support/...

From the Desk of Ian Culley @IanCulley

It doesn’t matter whether we’re talking about markets or summer vacations –  I always avoid the crowds and aim to beat the heat.

No lines. No traffic. No fake, overpriced food.

It also means dropping those hot semiconductor names and reaching for silver mining stocks…

July is by far the best month of the year for gold’s crazy cousin. And it’s not even close:

Unsurprisingly, silver futures gained roughly seven percent last week. They also eclipsed the previous month's high and printed their highest weekly close since January 2013 – a stellar way to start the month.

On the flip side, June takes the cake as Silver’s most challenging month of the year.

And what did Silver do last month?

It only fell by three percent, finding support at a critical shelf of former highs:

Silver futures are down almost three percent today alone. No biggie. 

From the desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.

We've also sprinkled in some of the largest ADRs from countries that did not make the market cap cut. 

These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.

It's got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.

The beauty of these scans is really in their simplicity.

We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness.

Let's dive in and take a look at some of the most important stocks from around the world.

Here's this week's list:

...

From the Desk of Ian Culley @IanCulley

Forget about the selloff in Bitcoin for a minute.

Coal stocks are ripping!

Perhaps they’re giving back some recent gains today, but most stocks are.

More importantly, Monday marked the largest one-day rate-of-change for our Coal Index since 2020…

If you’re wondering why we created an index of coal stocks, the answer is simple: The December 2020 delisting of the VanEck Vectors Coal ETF $KOL forced our hand.

They shut down the only coal ETF just as commodities began ripping (many toward new all-time highs). You can’t make this stuff up… 

One of our favorite names – Alpha Metallurgical Resources $AMR – has gained over 4,000% off the December 2020 lows. Unbelievable!

Almost four years later, the rally isn’t over for these names. 

Our coal index is on the verge of kicking off the next leg higher:

In this week’s commodity trade section, I’ll review the six coal stocks from our index, outlining critical levels to trade against and logical areas to...

From the Desk of Ian Culley @IanCulley

Chop, chop, chop…

Yields on sovereign debt are chopping sideways across the globe.

The US, France, Germany, Spain, and UK benchmark rates are well below their respective 2023 peaks.

But in Japan, the JGB 10-year yield is hitting its highest level in over a decade. 

Check out the Japan benchmark rate cruising above 100 basis points: 

Earlier in the week, the Japan 10-year yield reached 1.10 for the first time since July 2011. 

While the Bank of Canada, the Swiss National Bank, and the European Central Bank began cutting rates this year, the Bank of Japan (BoJ) may hike later this month. 

You can blame it on a plummeting yen or the BoJ’s Yield Curve Control policies. 

Either way, it’s clear that Japan’s era of negative interest rates has ended, and the previous decade’s easy money environment no longer exits — full stop. 

Instead of contemplating...

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As most of you know, we use 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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market...

From the Desk of Ian Culley @IanCulley

The smart money is snatching up Canadian dollars.

Last month, commercial hedgers extended their Canadian dollar exposure to their largest net-long historical position.

While positioning represents a condition – not a signal – we can only view the hedger's appetite for the loonie in one light…

Bullish!

Notice that extended commercial long positioning (the bright blue line in the lower pane) coincides with critical inflection points:

These market turns preceded extensive rallies in 2016, 2017, and 2020.

Before boarding the loonie’s next rip-roaring rally, price must provide a well-defined entry with a favorable risk-to-reward profile.

But the past two years of sideways action look more like a topping or bearish continuation pattern, not a bullish reversal:

The bullish argument for Canadian dollar futures doesn’t improve when we slap on a...

From the Desk of Steve Strazza @Sstrazza

Welcome to The Minor Leaguers.

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.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to...

From the Desk of Ian Culley @IanCulley

Investors are becoming restless.

Silver is dancing around a significant breakout level. And gold continues its sideways chop for the third straight month.

It’s certainly been a challenging time to hold precious metals trades – even for the most patient investors.

To kick off the third quarter, let’s utilize fresh monthly data to step back and review the primary trends for gold, silver, platinum, and palladium.

From the Desk of Steve Strazza @Sstrazza

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 $3T – to some of the new-age large-cap disruptors such as Arista Networks and Crowdstrike.

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.

Here’s this week’s list:

*Click table to enlarge view

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month.

Then, we sort the...

From the Desk of Ian Culley @IanCulley

Our cotton and sugar trades are working. Coffee is raring to go.

And crude oil is pushing toward a solid first-half finish.

Beyond that, commodities are dribbling lower.

Let’s review an energy contract that broke out two months ago and has never looked back—Natty Gas!

Natural gas futures are carving out an eighteen-month base below last year’s high:

I outlined our bullish outlook in late April. Natty Gas ripped the following week, rallying more than a dollar in just six weeks.

Now, price is consolidating within a twenty-percent range (potential right shoulder):

An upside resolution above the June highs offers another opportunity to buy natural gas. I like adding to current...