In case I haven't been obnoxious enough, we are in the early stages of a new bull market.
I cannot be more clear about this. I feel it in my bones.
Today, the Fed had their first meeting of the year, and did exactly what everyone thought they would do. The market flew straight into rally mode as soon as the press conference began. There were no surprises.
This is because, very much unlike 2022, the path of least resistance for risk assets is now higher.
We're seeing risk-on action characterize the tape on a regular basis.
Breakouts are sticking. The list of new highs is growing longer and longer. Meanwhile, new lows are almost non-existent, and the breakdowns from December have failed and followed through higher.
It's all bull market stuff.
Along the same lines, we're seeing more and more stocks offer bullish chart setups that we want to be buying. And we're entertaining all of them.
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.
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.
