Today's trade is in a $1B company that provides automatic identification solutions to commercial and government customers. Being that this company participates in the Software & IT sector, I expect it to perform well in a market environment where semiconductors are leading the way.

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

1. New position in GLD.
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!

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the two weeks ended January 3, 2025. This report is published bi-weekly, in rotation with The Minor Leaguers.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names.

There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

Click here for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers, there’s...

There's no way the S&P500 can rally again this year, right?

We just had 2 consecutive years of historic returns. The Nasdaq literally doubled since the end of 2022. 

Total Crypto Market-cap is now at $3.4 Trillion. It was only $750 Billion 2 years ago. You do the math!

The S&P500 was up 24% in 2023 and then up another 23% in 2024. 

How could things possibly get any better than this? I mean with the Fed, and the Inflation, and the Trump, and the Recession and the imminent crisis they all keep telling us about.

How could stocks possibly go up again in 2025? After the historic returns we just saw in back-to-back years?

Well, my friend...

Today's number is... Q1

After two weeks of enjoying the Australian summer at the beach house, I've returned to my desk! I hope everyone had a lovely Christmas and celebrated the start of the new year with family and friends!

Let's start the year off with some cycle data… 

Stocks historically do not perform well in the first quarter of a post-election year.

Here’s the chart:

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

Let's first break down what the chart shows:

This blue line represents the average return in post-election years since 1950 for the S&P 500.

The Takeaway: The stock market rewarded bulls over the past 12 months, as 2024 was one of the best election years ever!  

However, I began to notice a...

Uncle Warren is at it again, increasing Berkshire Hathaway's stake in VeriSign Inc $VRSN.

The latest filing reveals a purchase of 20,044 shares, bringing Berkshire's ownership to 13.83%.

VRSN is consolidating constructively just below a key resistance level:

The critical threshold is at 255. As long as the stock remains below this overhead supply, it’s difficult to find an attractive setup for the long side.

However, a decisive breakout above this area would change the narrative, presenting a compelling opportunity to get involved.

Here’s The Hot Corner, with data from January 3, 2024:

Meanwhile, Massachusetts Financial Services Company disclosed a 13G filing for TransUnion $TRU, increasing its stake from 9.75% to 10.00%.

Closing out the year, tech stocks are stealing the spotlight. Despite showing a bit of weakness this December, the big picture is clear: the bullish trends are undeniable.

Meanwhile, many parts of the market are settling into trading ranges, while others are dipping back to test key support zones.

Take Retail ($XRT), for example. It’s gone from red to green over the past month, making an impressive transition.

What’s particularly intriguing is the chart—it’s revisiting a major breakout level.

This is a natural spot for the group to gather momentum and start climbing higher.

Heading into 2025, a key theme that stands out is speculative growth.

The Ark Innovation ETF $ARKK has completed a full transition from red to dark green, indicative of strong relative strength.

In the below chart, we've stretched the x-axis to bring awareness to the scope of price discovery that could unfold in 2025.

It’s easy to focus on the leaders, but let’s shift our attention to the bottom of the rankings — energy.

This sector has been consistently lagging, showing red for some time. That’s the beauty of these Power Rankings; they give us an early warning when trends start to shift.

Energy hasn’t turned the corner just yet.

Meanwhile, Crude Oil is sitting at a critical support level and remains tightly coiled.

If we see an upward breakout in Crude, it wouldn’t be surprising to watch Energy transition from red to green.

Large-cap and growth stocks continue to outperform, while small-cap and value stocks lag behind.

One key development we're watching closely is whether the recent softness in U.S. indices, particularly the S&P 500, marks the formation of a potential lower high.

Should the S&P break to a new low, it would confirm a shift in the short-term trend to the downside.

Why guess when you can know?

Unlock expert insights with All Star Charts Premium and confidently navigate market shifts. For a limited time, get $500 off an annual membership and start maximizing the...

It's difficult to ignore how green Argentina $ARGT has been on our rankings ever since Javier Milei's election victory. It's been such a standout in a region that has struggled in recent times.

Compare Argentina $ARGT to the remainder of Latin America.

A development that has us curious is whether Latin America broadly speaking while begin to recover into the new year.

Here is the iShares Latin America ETF $ILF sitting on a key level of support; this is a logical area for this region to see a recovery from its recent weakness.

This year, much of the buzz has been around technology subgroups, especially Semiconductors.

However, two less-hyped but highly consistent performers have been Insurance and Aerospace & Defense. Over the past three months, these "boring" sectors have shown steady strength, staying consistently green.

Year-to-date, Insurance ($IAK) has delivered an impressive 26.40% return (green line), while Aerospace & Defense ($ITA) has climbed 18.30% (blue line).

Even more encouraging is that both are sitting near logical support levels, presenting favorable entry opportunities—assuming their strong trends persist.

Speculative growth has been the strongest theme into the end of the year.

But interestingly, we're noticing a major divergence between U.S. growth and E.M. growth. While the former is at the top of the rankings, E.M. growth has transitioned to red.

We need to see the Emerging Market Internet ETF $EMQQ reclaim this breakout level if we want to have a more positive stance on this theme.

We’ve noticed a significant shift in both Large Cap Technology ($XLK) and Equal Weight Technology ($RSPT), as they transition from red to deeper shades of green, as illustrated below.

This suggests a resurgence of growth leadership heading into 2025.

From a technical perspective, the breakout of the Large Cap Technology ETF ($XLK) from a six-month base further supports this trend.

With this setup, there’s considerable potential for technology to push higher as we move into the new year.

We're seeing a stronger performance in larger stocks and those within the growth factor, with more of them in the green compared to smaller and value stocks.

This is especially clear in the Small Cap ETF ($IWM), which recently failed at a key level of resistance.The Vanguard FTSE Europe ETF ($VGK) breaking down to fresh lows is particularly concerning. A swift recovery here is essential to shift the narrative.

Typically, after a rejection like this, we tend to see a period of sideways movement as the market absorbs overhead supply before the next move higher.

One striking observation is the widespread underperformance of European ETFs, which are predominantly in the red.

Visualize this: a map of Europe shaded with the same colors as the table. With few exceptions, the dominance of red over green is hard to miss.

The Vanguard FTSE Europe ETF ($VGK) breaking down to fresh lows is particularly concerning. A swift recovery here is essential to shift the narrative.

While value stocks have been beaten down in December, what remains unchanged is the weakness out of energy.

Just look at how much red is in all the energy industry groups.

The broader sector has been in a straight line lower this month, eroding any YTD gains it had. There's no sign that this weakness is changing.

Speculative growth has been a strong area of leadership since the election.

You can see how the flagship Innovation ETF $ARKK has transitioned from deep red to deep green, along with the other funds.

While we've seen ARKK sell-off following the FOMC, the longer-term picture is crystal clear.

This is an area of the market that has undergone a structural trend reversal, which is clearly bullish looking out into 2025.

I've noticed that the technology sector ETFs have turned from red (or light green) to a darker shade of green.

This makes sense with growth picking up steam while value has cooled off.

All technology sector ETFs look prime to break to new highs. While larger technology companies have outperformed, it's positive for the sector to see all three at their highest level they've been all year.