Are Energy and Financial stocks about to lead the market?
Cyclical groups are catching all the right tailwinds in this environment.
Crude Oil and Yields are pressing to new 52-week highs as investors continue to favor more economically-sensitive stocks and commodities in general. This is a bullish development and supports higher prices for some of the most beaten-down risk assets... even Financials and Energy.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
Are we finally entering the long-awaited alt-season?
We're seeing incredibly healthy rotation within the Cryptocurrency space, which we can only interpret as support for higher prices for this group of digital assets moving forward.
Here's a post in October where JC outlined that the path of least resistance was higher in BTC, and another in December where we outlined a target, which was hit in a matter of days. Our current target for the Crypto leader is 70,000.
The price action is clear: Crypto continues to benefit from a well-established uptrend.
Our main focus today is the broadening participation of many Altcoins (lingo for any Cryptocurrency not named Bitcoin).
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
We continue to harp on the risk-on themes that support our bullish macro thesis.
If Bitcoin's run to $50,000 or the latest YOLO stocks aren't too distracting right now, you might have noticed Crude Oil just registered new 52-week highs for the first time since fall 2018.
Or maybe you're ahead of the curve and caught our post about the Energy Sector experiencing what looks like a bullish initiation thrust just a few weeks ago.
Or perhaps you saw Financials just closed the past week at fresh all-time highs... finally breaking out after almost 15-years of no progress!
On top of all this action, the US 10-Year Yield is also pressing on its highest level in almost a year.
It's clear that more cyclical stocks and economically sensitive Commodities are taking on leadership roles. We're in quite the risk-on environment.
Considering the evidence we just listed, it's finally time to address the elephant in the room...
In a further effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."
We write a post every other week where we outline some of our favorite setups from the watchlist.
We've already had some great trades from this universe and couldn't be happier about the early feedback.
Moving forward, we'll be rotating this column with "Under The Hood" each week.
In order to make it onto our Minor League list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.
Then, we simply sort the stocks by their percentage from new highs. Easy done.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
Leadership in this environment is stretching far and wide.
We're seeing a growing number of industry groups and areas not only making new highs but also outperforming and offering us more and more avenues to express our bullish thesis on stocks and risk assets in general.
The point is, with such an overwhelming amount of leadership these days, we can be picky and place our bets on only the best of the best in each group.
In today's post, we'll explore a hot new growth industry we haven't covered in much detail yet - Autonomous Vehicles.
Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying 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.
Dividend aristocrats are easily some of the most desirable investments on Wall Street. These are the names that have increased dividends for at least 25 years, providing steadily increasing income to longer-term minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That’s why we’re turning our attention to the future aristocrats. In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we’re curating a list of stocks that have raised their payouts every year for 5-9 years.
Introducing the Young Aristocrats. We like to say these are “stocks that pay you to make money”. Imagine if years of consistent dividend growth and high momentum & relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
We've enjoyed a ton of success with the bottoms-up scans and the columns they've inspired.
We absolutely love our scans! When we combine them with our traditional top-down approach, they make it almost impossible to miss key market themes.
In fact, we've launched four columns around these scans since last year -- and we have many more that we only run internally.
Today, we're sharing one with you. We call it "Fade The Street,"and it's one of my personal favorites.
The scan leverages data from sell-side analysts including their buy/sell ratings and price targets in order to identify stocks with the potential to become the market's next big winners.
How do we do this? Simple...
We scan for top-performing stocks that happen to be some of the most-hated and out-of-favor names on the street. Basically, we're looking for names that analysts have gotten wrong - or at the very least, are trending against their respective ratings.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
In last week's report, we played "devil's advocate" and laid out some of the more bearish developments we could find out there.
But all-in-all, the market is still providing bears less room to make a sound argument. We continue to find that any bearish evidence is primarily isolated to shorter timeframes... and even then, still overwhelmed by the abundance of bullish data points.
From the desk of Steve Strazza @sstrazza and Grant Hawkridge @granthawkridge
Marijuana stocks have been smoking hot over the trailing quarter, with the Alternative Harvest Marijuana ETF $MJ more than doubling since the election on November 3rd.
Considering this new leadership role over the near-term, today we're going to do a follow-up on our last deep dive into the space, which we published last fall.
Back then, we were simply looking for a bottom and mean reversion move higher, which we got... Now, with the industry making new highs, we want to see how things are looking on both an absolute and relative basis.
And as always, we'll check in on some of our past trades in the space and highlight today's strongest stocks, along with trade setups skewed in our favor that we want to use to express our bullish thesis.
Before we get into the weeds, let’s start at the industry level with the Alternative Harvest ETF (MJ).
