Thanks to everyone who joined us for today's Hot Corner Insider Weekly Strategy Session.

I think I surprised JC during this morning's internal analyst Call. He asked me if I had any "spicy trades" in mind.

In fact, I did have one.

It's a bet on an upcoming earnings release kicking a dog semiconductor stock while it's down, sending prices even lower.

When it comes to Canada, it's not about tariffs or political headlines making the rounds these days.

The real focus is the Canadian Dollar.

With nearly a 10% weighting in the Dollar Index $DXY, CAD is a crucial piece of the broader currency puzzle.

CAD/USD is pressing against a decade-long support zone, hovering around a key level that triggered strong reversals in 2016 and 2020.

What makes this even more significant is CAD’s close correlation with commodities—especially oil and metals—due to Canada’s heavy exposure to natural resources.

Just look at how the Canadian Dollar has historically traded alongside Crude Oil over the past years.

They look almost identical.

They say history doesn’t repeat, but it often rhymes. If CAD/USD rips higher from here and buyers defend support around 0.68, we can expect energy stocks, metals, and...

From the Desk of Alfonso De Pablos @AlfCharts

Welcome to The 2 to 100 Club.

In this scan, we look to identify 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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market behemoths they are today.

When you look at the stocks in our table, you'll notice we're only focused on Technology and Growth industry groups such as Software, Semiconductors,...

In today’s Daily Digest, we’ll review the following:

1. No new positions today.
2. Adjustment to GLD position.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Tuesday was jam-packed with earnings reactions, most of which were negative.

Merck $MRK, one of the largest drug manufacturers in the world, led the way lower after releasing terrible guidance. This is after the stock had its second-worst earnings reaction ever in Q3 2024.

On the bright side, Palantir Technologies' $ PLTR earnings report was outstanding. The stock had its second-best earnings reaction ever after crushing expectations and raising guidance.

Let's talk about what else happened 👇

*click the image to enlarge it

The second-best earnings reaction came from Xylem $XYL, which beat its expectations and rallied over 5% with a reaction score of 3. They've successfully integrated Evoqua into the company, which delivered cost synergies 18 months ahead of schedule.

The market loved it.

Another report the market hated came from PayPal $PYPL which beat its expectations but fell over 13% with a reaction score of -6.74. It was really bad.

PYPL even announced a new $15B stock repurchase program, which wasn't enough to offset the growth...

Pleasant Lake Partners LLC made a notable move in 1-800-FLOWERS.COM $FLWS. The investment manager acquired 724,700 FLWS shares, a purchase worth approximately $5.7 million.

Meanwhile, Pzena Investment Management increased its stake in Magna International Inc $MGA, filing a 13G that reflects a rise in ownership from 9.15% to 10.00%.

Here’s The Hot Corner, with data from February 4, 2025:

On the insider front, Director Robert Stallings disclosed a modest purchase of Texas Capital Bancshares $TCBI, buying shares valued at $250,434.

We've discussed this all year. What's the catalyst to send stocks and other risk assets ripping in the first half of the year?

It's the U.S. Dollar. 

I continue to be impressed with just how resilient stocks have been, despite the Dollar's relentless bid over the past 4-5 months.

And now here we are, with so many people crying all weekend about something they call "tariffs", and they're slamming the Dollar.

It's all happening right at the 61.8% retracement of the entire '22-'23 decline. Do you think that's a coincidence?

I do not.

When it comes to the stock market, we always like to do a sum-of-the-parts analysis, whether it's the S&P500, or Dow Industrials or NYSE components. We call it market breadth.

We go through the exact same process in forex markets.

If you think that the US Dollar is going to fall, sending stocks and other risk assets souring, then you'll need to see a bid in other forex markets.

We can go one by one if you want. But I brought 2 important ones with me that I think are about to rip, confirming the US Dollar weakness.

Here's the Canadian Dollar breaking below former support, and...

Today's number is... -0.98

The St. Louis Fed Financial Stress Index has declined to -0.98, the lowest level this market stress index has seen in over 17 years.

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what the chart shows:

• The blue line represents the price of the S&P 500 index.
• The green and red line represent the St. Louis Fed Financial Stress Index (This data set has been inverted). When the line is green, it indicates that financial market stress is lower than normal. Conversely, when the line is red, it indicates that financial market stress is higher than normal.
• The gray line represents the zero line for the St. Louis Fed Financial Stress Index, indicating normal financial market conditions.

The Takeaway: The St. Louis Fed Financial Stress Index measures financial stress in markets and is published by the Federal Reserve Bank of St. Louis. This index is...

It’s been a wild ride for crypto these past few months.

The post-election rally was one for the record books.

But the same is true for the steep and swift drawdowns that have ensued.

The majority of these altcoins are down more than 50% from their December highs. The average cryptocurrency has been decimated. 

It is common for volatility to spike in both directions at inflection points… and I think the entire crypto market is at one now.

The question is what direction are we going in?

When I think of charts like Binance, Ethereum, or Solana… they’ve been rangebound for a long time. These primary trends are sideways.

Here they are shown trading right around the same levels they were at in Q1 of last year:

So it could really go either way. I don’t have a strong opinion on whether they resolve higher or lower from here. But when I see a resolution, I’m going to go with it. 

I’ll be adding on breakouts and I’ll be out if these ranges break down. In fact, I already ...

When it comes to Canada, it's not about tariffs or political headlines making the rounds these days.

The real focus is the Canadian Dollar.

With nearly a 10% weighting in the Dollar Index $DXY, CAD is a crucial piece of the broader currency puzzle.

CAD/USD is pressing against a decade-long support zone, hovering around a key level that triggered strong reversals in 2016 and 2020.

What makes this even more significant is CAD’s close correlation with commodities—especially oil and metals—due to Canada’s heavy exposure to natural resources.

Just look at how the Canadian Dollar has historically traded alongside Crude Oil over the past years.

They look almost identical.

They say history doesn’t repeat, but it often rhymes. If CAD/USD rips higher from here and buyers defend support around 0.68, we can expect energy stocks, metals, and...

Today we're switching up our regular broadcasting and taking our ETF Power Rankings to the stocks of the Dow 30.

The beauty of these rankings is that they can applied to any universe of our choosing - today we're doing the Dow 30.

The big standout to us is how Nvidia $NVDA has transitioned from a deep green to a lighter shade even before it gapped down last Monday.

Instead, traditional names like Walmart, 3M, and IBM have been showing the most strength in recent times.

On the other end of the spectrum are names like Merck, AMGEN, and Nike.

Through these rankings, we can instantly see where to focus our attention. And an area we've been attracted to this week is crypto; over $2B of positions were just liquidated, which has historically been a fantastic buying opportunity.

You can watch our Senior Crypto Analyst, Louis Sykes, outline what he's doing to profit off this recent development...

Suppose you're watching the evening cable news, reading the New York Times (or newspaper of your choice), or paying attention to your echo chamber on the socials. You'd be right to assume all the economies of the world (both friends and enemies of the U.S.) are staring into the abyss and their stock markets are about to be cut in half.

That's cool if you'd like to live that way. I doubt it'll make you any money, though.

You're smarter than that. This is why you're here. We're not affected by headlines. We follow price.

And the relentless bid in Chinese stocks cannot be ignored.

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

...

In today’s Daily Digest, we’ll review the following:

1. New position in XLI.
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Every year, without exception, there's always a new headline, a fresh "fear," or just another reason to sell.

Whether it's a new geopolitical tension, economic concerns, or the latest updates on DeepSeek and tariffs, there's always something that seems to provide something to “worry about.”

But here’s the truth. Investors have dealt with headlines like these for decades. It’s nothing new.

Our friend Ryan Detrick put together a great chart that perfectly illustrates this point.

If you get too caught up in the noise, it’s easy to fall into panic and lose sight of the bigger picture.

After all, the market is a discounting mechanism and is likely ahead of any headline.

The key is to block out the distractions and stick with your plan. Risk management, discipline and your rules.

Today's most significant insider transaction comes straight from a Form 4 filing by none other than Warren Buffett.

Uncle Warren just scooped up 2,308,119 shares of Sirius XM Holdings $SIRI—a $54 million bet—pushing Berkshire Hathaway’s stake to 35.35%.

When Buffett adds, it’s worth paying attention.

Here’s The Hot Corner, with data from February 3, 2025:

Meanwhile, hedge funds are making moves in biotech:

• RA Capital Management disclosed a $50 million purchase in 89bio $ETNB. This is a fund known for backing early-stage biotech names before big breakouts. Their track record includes early stakes in Moderna in 2015.
• Paradigm Biocapital Advisors just filed a 13G for Edgewise Therapeutics $EWTX, reporting a 5.00% stake.

Another insider transaction to hit the tape was from Platinum Equity LLC.

A Form 4 filing reveals a $32.5 million purchase...