Tuesday night we held our January Monthly Conference Call, which Premium Members can access and rewatch here.
In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.
We're putting on an $SMH March 265/270/320/325 Iron Condor for an approximately $2.15 credit.
This means we’re short the 270 puts and 320 calls, while protecting our position $5 away on both sides with long 265 puts and long 325 calls. We’ll be doing the same number of contracts at all four strikes to keep the risk even.
Check out our short video with the thought process behind these trades:
As many of you know, something we've been working on internally is using 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.
Big day today! I got Josh Brown to come on the podcast and talk about all things Technical Analysis and Financial Markets. Josh is probably friends with more Technicians across the country than almost anyone else. He respects what we do, and even works in some trend following systems at his own firm. We discuss all of it!
In this episode we talk about Sector Weightings in Markets, how RIAs can bring Crypto to the portfolios of their clients and why Gold peaked 40 years ago when adjusted for inflation.
We don't always agree on things, but that's what makes this fun.
Josh and I battle it out in this one. Give it a listen and let me know what you think!
Also make sure to Subscribe to Josh's Youtube Channel: The Compound RWM
We debuted a new scan recently which goes by the name- All Star Momentum.
All Star Momentum is a brand new scan that guides us towards the very best stocks in the market. This time around, we have incorporated our stock universe of Nifty 500 as the base. Among the 500 stocks that we follow, this scan will pump out names that are most likely to outperform the market.
While we go through our lists of sectors and stocks on a weekly basis, we thought of launching a product that would highlight the strongest performers in our universe. These are the ones that are primed for an explosive move.
Just like The Outperformers scan, this is a list of stocks belonging to the sectors that display relative strength in the market at any given point in time. Since sector rotation is the lifeblood of a bull market, we will be ahead of the curve before the gears keep shifting.
From the desk of Steve Strazza @Sstrazza and Grant Hawkridge @granthawkridge
One of the most important themes these days is the rotation between growth and value stocks. Groups like energy and financials have been breaking to new highs while growth and tech indexes have come under serious pressure.
So far, 2022 has been a true tale of two markets.
While cyclicals and value stocks appear to be gearing up for a momentous year, it looks like the party is finally coming to an end for the growth trade.
We want to lean on the value-heavy leadership groups for long opportunities in 2022. As for growth, we think it's likely to remain messy as interest rates continue to rise.
When we look beneath the surface at growth and value stocks right now, our breadth data is confirming the action we’re seeing at the sector level.
Let’s dive in and discuss...
Here's one way to visualize the opposing paths of large-cap value and large-cap growth right now. This indicator shows us the percentage of stocks above their 50-day moving averages for each of these indexes:
On this episode of Pardon The Price Action, we're talking about the implications of rising interest rates. This is no longer an environment where Growth stocks outperform. It's actually the exact opposite.
We're also seeing these signs from other countries around the world with much more exposure to the Value sectors like Energy, Materials, Industrials and Financials.
US Investors have a lot more exposure to Technology and Growth than almost every other country in the world.
I think Latin America is worth watching, China and many other emerging markets.
Over the last quarter, we saw the market really struggle to pick a direction and get going. There were a lot of sideways moves and a lot of failed breakdowns. Currently, we've seen a resumption in the positive trend in most sectors, supported by market breadth.
Today we're taking a look at stocks from the Industrial Manufacturing sector. A handful of stocks are signifying what could be a good bullish going forward.
What if the outperformance we've seen from the United States stock market for so long is behind us?
Is your portfolio prepared for an environment where US stocks underperform the rest of the world?
What about your peers?
Do you think Financial Advisors across the country have positioned their clients to take advantage of outsized returns outside the United States?
I talk to a lot of people.
And my answer is no. A big fat obnoxious NO.
I don't think they're ready at all. And the pain could last a while.
By the time your average financial advisor gets off the golf course and notices how poorly positioned their clients are, it's usually much later in the cycle.
We’ve already had some great trades come out of this small-cap-focused column since we launched it in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.
We recently decided to expand our universe to include some mid-caps…
For about a year now, we’ve focused only on Russell 2000 stocks with a market cap between $1 and $2B. That was fun, but it’s time we branch out a bit and allow some new stocks to find their way onto our list.
