From the Desk of Kimmy Sokoloff

The market pretty much drifted lower all day.

It erased yesterday's bounce, and $SPY closed to its respective gap below.

Is now the time to get long equities?

If you kept up with the headlines and what the sell side analysts have to say, you'd think it would be.

Fortunately we try to stay ahead of the curve around here.

Yesterday we discussed the recent sentiment shift among permabears, wall street analysts, hedge funds and financial media.

You can read that again here.

To add to that sentiment shift, here is the our internal sentiment composite which includes data from Individual Investors, Advisories, Active Investment Managers, Volatility and the Options Market.

As you can see last year saw some of the most pessimistic levels in history, giving us one of the greatest buying opportunities we've ever seen.

We've adjusted a position in the Paid-to-Play portfolio today:

The largest insider transaction on today’s list comes in a Form 4 filed by Michael Andrew Chambers, director of Sarepta Therapeutics $SRPT.

Chambers reported an additional purchase of 23,686 SRPT shares, equivalent to $2.5 million.

From the Desk of Kimmy Sokoloff

The indices ran right to resistance yesterday only to get slammed overnight.

It's a little bit of a tug of war right here between the bulls and the bears.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

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.

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...

From the Desk of Ian Culley @IanCulley

One of my favorite scenes from "Forgetting Sarah Marshall" is when we get to meet the in-house surf instructor, played by Paul Rudd.

Rudd’s character, Chuck, a transplant local, imparts sage advice, “When life gives you lemons, just say f@&k the lemons and bail!”

I always laugh at that one, even as I write this note.

That’s probably because  I’ve spent the better part of the past twenty years chasing waves – but I don’t share this Hollywood version of a stoner-surfer ethos regarding life.

But I do follow this mindset when it comes to markets…

From the Desk of Kimmy Sokoloff

$SPY and $QQQ are stuck under a lot of resistance levels.

There's a possibility we break above those levels this week, but we must keep stops tight.

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.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they’re doing so for one reason only: because they think...

No matter how you measure volatility, there is no ignoring the fact that the daily moves (both realized and expected) have shrunk dramatically in the cryptocurrency space, most notably in granddaddy Bitcoin $BTC.

Here's Strazza this morning on twitter:

Implied volatility can remain muted for as long as it wants to. It's not going to expand on my schedule. But at least when we're range bound and options prices are relatively cheap, we can position ourselves further out in time to take advantage of the next big move.

That's exactly what we're going to do.

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From the Desk of Ian Culley @IanCulley

One of my favorite scenes from “Forgetting Sarah Marshall” is when we get to meet the in-house surf instructor, played by Paul Rudd.

Rudd’s character, Chuck, a transplant local, imparts sage advice, “When life gives you lemons, just say f@&k the lemons and bail!”

I always laugh at that one, even as I write this note.

That’s probably because  I’ve spent the better part of the past twenty years chasing waves – but I don’t share this Hollywood version of a stoner-surfer ethos regarding life.

But I do follow this mindset when it comes to markets…

Rising real yields and a pesky US dollar are making lemons of the precious metals space.

A weakening dollar and falling interest rates lined up to vault gold toward new all-time highs. 

Instead of kick-starting a precious metals rally, both potential catalysts are heading in the opposite direction (higher) – and the focus with it.

I’m not monitoring these shiny rocks for breakouts. I’m tracking fresh breakdowns.

The June pivot lows mark a critical level of interest as the precious metal space...

The next new position in our Paid-to-Play portfolio is:

The largest insider transaction on today’s list comes in a Form 4 filed by Michael Andrew Chambers, director of Sarepta Therapeutics $SRPT.

Chambers reported a purchase of SRPT shares worth $3.7 million.

The Nasdaq100 is already down 4.5% this month. Technology as a sector is down almost 6.5% for August.

But corrections are a choice, not a requirement.

As an investor, you make the choice and decide which assets you want to own and which you do not.

Remember, "Passive Investing" is a lie. There's no such thing. All investors are active. The difference is whether you choose your portfolio holdings, or you let some random index providers make those decisions for you.

But we're all active investors, whether we like it or not. Don't forget that.

So even thought the indexes are messy this quarter, take a look at Energy hitting new 6-month highs this week:

From the Desk of Kimmy Sokoloff

It should be a little bit of a calm week, although we do get retail sales coming up.

Typically in mid-August we get a bounce.

$SPY still hasn't closed its gap below at 442.97. I was looking for that last week, no dice.

From the desk of Steve Strazza @Sstrazza

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 long-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 five to nine years.

We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money." Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

By adding our technical analysis to the mix, the Young...

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

From the Desk of Ian Culley @IanCulley

Energy contracts are breaking out.

Crude oil and gasoline futures are completing major reversal patterns.

Heating oil is ripping higher.

Natty gas has traders on the edge of their seats (what’s new?) as it heads into a seasonally favorable stretch.

But what about the rest of the commodity space?

Check out the overlay chart of our equal-weight energy index and our equal-weight broad commodity index:

Both averages have followed the same path since the 2020 lows despite a mere 15% weighting toward energy in our broad commodity index. 

But energy is pulling away. Oil and gas names are taking on a leadership role among US equities as their underlying commodities confirm by digging in and resolving higher.

I like buying energy – stocks and commodities. And I outline two new trade ideas from the energy space at the end of today’s post.

I love a good trade setup as much as anyone....