From the Desk of Steve Strazza and Alfonso Depablos

The most significant insider transaction on today’s list is a Form 4 filing by Cormorant Asset Management LP.

The hedge fund reported a purchase of $10.4 million in EyePoint Pharmaceuticals Inc $EYPT.

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 Steve Strazza and Alfonso Depablos

The most significant insider transaction on today’s list is a Form 4 filing by Farhad A. Nanji, founder of MFN Partners Management LP.

Nanji reported an additional purchase of $24 million in RXO Inc $RXO.

As we've discussed here plenty, this year is very different than last year.

Remember in 2023 when breakouts would stick and prices of stocks and ETFs would keep heading higher?

That's not happening these days.

It's actually been the opposite.

The bigger question for me is whether these new trends are here to stay, or if at some point the stock market reverts to those longer underlying uptrends that got us here.

Another question I have is which mining companies are going to lead their groups as metals continue to make new highs.

Here's a good way to view it. This is Gold breaking out of a decade+ long base to new all-time highs, resuming its secular uptrend from the 2000s.

Have you counted how many stocks and sectors put in failed breakouts?

Market breadth has been deteriorating so fast that most of the "breakouts" that everyone was so excited about last quarter are all failing one by one.

It's pretty nasty out there.

That's what happens when you get aggressive and buy stocks while breadth is deteriorating in your face.

I've seen this too many times to get fooled again.

You're seeing a lot of first timers out there who haven't learned this yet.

One of the better examples is in the Equally-weighted S&P500. Look at this nasty failed breakout.

How's the stock market correction treating you so far?

The Nasdaq100 is only up 1% this year, underperforming a typical year for the market by a long shot.

The Dow Jones Industrial Average is flat for 2024.

The Russell2000 Small-cap Index $IWM is still down this year.

Emerging Markets $EEM are down.

Meanwhile Gold is up 15%. Silver is up 20%.

In fact, the Dow/Gold ratio just hit new 3-year lows this week:

From the Desk of Alfonso Depablos @AlfCharts

2024 is far from being like 2023. 

While we’ve experienced some healthy sector rotation, the first quarter was characterized by waning momentum.

With these long-standing momentum divergences in place, so far, the second quarter has been characterized by selling pressure. 

Since last week, we’ve seen an increasing number of these divergences confirmed by price. 

Making matters worse is where this downside is taking place. We're also seeing a growing list of indexes and sectors lose key former highs.

Until the bulls can reclaim these polarity zones, markets will remain messy. 

Let’s talk about some of them.

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 $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

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 remaining names by their proximity to new 52-week highs.

This leaves...

You can now add the Dow Jones Industrial Average to the list of indexes that are DOWN for the year so far.

I've argued many times that the Dow Jones Industrial Average is the world's most important stock market index.

And while I'm not going to get into all the reasons again today, I'll just show you the chart of the S&P500 and Dow Jones Industrial Average going back 60 years.

They move together...

From the Desk of Steve Strazza and Alfonso Depablos

The most significant transaction on today’s list is a 13D filing by Baker Bros Advisors LLC for Bicycle Therapeutics plc $BCYC.

Baker Bros revealed an increase in its ownership stake in BCYC from 12.70% to 19.90%.

Stock market volatility is at the highest levels since October.

The majority of stocks are NOT in uptrends.

This market is NOT like it was last year.

In fact, coming into today, the majority of stocks on the NYSE are down for the year. Also 2/3rds of the stocks on the Nasdaq are negative for the year.

Go and count for yourself.

You'll quickly see that the majority of stocks in the Large-cap Nasdaq100 are down this year. Same for the Small-cap Russell2000 Index and the S&P Mid-cap 400.

Different markets call for different strategies.

Here's the $VIX hitting levels this week not seen since Halloween:

From the Desk of Steve Strazza and Alfonso Depablos

The most significant insider transaction on today’s list is a Form 4 filing by Farhad A. Nanji, Founder of MFN Partners Management LP.

Nanji reported a purchase of roughly $832,400 in RXO Inc $RXO.