When I think about bonds, credit spreads are always at the top of my mind because they provide an excellent gauge of market health.

We simply measure the yield difference between a Treasury bond and a High-yield bond with the same maturity.

Another way to do it is by looking at the prices of the High-Yield Bond ETF $HYG compared to the Treasury Bond ETF $IEI:

When bond market investors are confident and willing to take on more risk, they drive up the value of High-yield bonds, causing this ratio to increase or credit spreads to narrow.

Conversely, when investors seek safety, credit spreads widen, which doesn't not bode well for risk assets.

As you can see in the chart, this ratio is pushing up against its highest level of the year.

This action suggests that there's no systemic risk upon us.

As long as that remains true, we can feel comfortable that equities and risk assets, in general, will stay in good shape.

Hope you enjoyed this post!

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

1. No new positions today.
2. Rolled KRE into December options.
3. Exited GDX for a profit.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Due to Monday’s holiday there are no insider filings to report today. We’ll be back tomorrow with a look at that activity.

In the interim, Sea Ltd $SE has been on our radar ever since Rep. Kurt Schrader reported a position in a political filing back in 2022.

When the guys returned from Asia last year, we started stalking it even more closely. While it had an exciting growth story, more importantly, it had no evidence of a bottom. 

The stock was free-falling in a 90% drawdown back then.

So, we've been waiting patiently for a perfect pitch for some time now. 

We need to see clear signs of a trend reversal before we follow insiders into their trades. While our hot corner data is great, the chart always comes first.

And after several years, we finally think this chart is ready for us.

When we first traded it in March of this year, ...

Everything was working today.

US indexes all booked nice gains, with the Dow and S&P achieving another new all-time high.

There was a synchronized global rally led by China’s Shanghai and Shenzhen, both up over 2%.

Software, financials, industrials, General Electric, Nvidia, Goldman Sachs… 

They all had one thing in common to start the week: new highs.

But it was the crypto market, more than anything, that was giving me the risk-on feel.

Alts are waking up here. Our custom altcoin index was up over 6% today.

More importantly, it looks like Bitcoin is about to break out of this range we’ve all been waiting for.

Here’s how I know:

This is a triple-pane chart of the three premier crypto market equities. 

MicroStrategy, Robinhood, and Galaxy Digital have all been consistent leaders during this cycle. As such, I view them as preferred vehicles for expressing bullish bets on BTC and crypto.

They also offer a nice mix of crypto market exposure, with one acting as a juiced BTC fund,...

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 October 11, 2024. 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’...

Earlier this year we wrote about platinum futures gearing up for a breakout as gold futures were printing fresh all-time highs.

So far the trade has been a dud as the price action has been a rangebound mess.

But the former powerhouse is setting up for us to take another swing at it.

Let's talk about the little silver:

From the Desk of Steve Strazza @Sstrazza

What's better than a Bitcoin miner short squeeze?

Some of our best trades have come from these stocks as they can make dramatic moves in both directions.

Our crypto desk recently wrote "it appears this seven month bear market is reaching its concluding stages." 

With that in mind, what're we buying?

We're buying a leader in the crypto mining industry with a double-digit short interest and warrants to juice our returns even more.

Let's talk about it:
 

...the higher in space.

Today's trade is in household name that is emerging from a 3-year base and on the verge of new all-time highs.

Due to earnings on the horizon, we'll be utilizing a spread to keep our costs in check and take advantage of some relative high options premium in out-of-the-money calls.

If you're not a member, sign up here.

On last week’s call, we discussed putting a new trade on SoundHound AI $SOUN as our current calls are really running out of time.

We still love the setup. It’s the same exact situation as when we put the initial trade on two months ago, but better. 

This coil is truly at the apex of its range. A resolution is imminent. Let’s make sure we have the right exposure for it.

Price is currently sitting around the base breakout zone that coincides with the VWAP from the IPO.

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!

Guess who’s back on today's list? None other than Uncle Warren himself!

Warren Buffett just dropped a significant $86.7 million on Sirius XM Holdings Inc $SIRI.

Buffett's Berkshire Hathaway has been a shareholder of SIRI since 2016.

The firm owns 108,719,088 shares, representing a 32% interest and market value of $2.8 billion.

SIRI is up over 3.50% pre-market on this news. We always watch Berkshire’s activity closely, as its filings tend to be market-moving events.

Here’s The Hot Corner, with data from October 11, 2024:

As I've been writing about for some time now, it appears the crypto bear market is concluding.

We're in a bull market in traditional assets and stocks are still pressing higher.

I'm still bullish looking ahead in the coming months and quarters, but neutral in the short term as Bitcoin trades sideways in anticipation of a breakout.

With the Dow Jones Industrial Average hitting new highs every week, the question remains: What about the Trannies?

When you study every market cycle going back over 100 years, you'll notice that the Dow Industrials and Dow Transports move together. 

They go up together for a while, and then they go down together for a while, and then up again, and the cycles repeat.

In this bull market, the Dow Industrials broke out towards the end of last year and have been making new all-time highs throughout all of 2024. 

But the Dow Transports have not....

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.

The worst humans on the planet have been promising you for years that this was just a "bear market rally".

They warned you every day about some made up catastrophic event that was going to occur at any moment.

But these people are not that dumb.

They were just lying to you.

Are you noticing?

Here is the S&P500 hitting new all-time highs along with the equally-weighted version of the S&P500 ALSO hitting the highest levels in history.

These are only things you see in healthy market environments.

The S&P500 on both a market-cap weighted and equally-weighted basis making new all-time highs every week is NOT something you see in bear markets.

But how long will this bull market last?

Does it still have more room to run?

Well, the Dow Jones Industrial Average - the world's most important stock market index - looks to be starting a new leg higher after breaking through its first target:

After seeing all of this above, are you willing to make the bet that this bull market ends before these monster bases shown below complete to the upside?

Look at the Dow Transports and S&P600 Small-cap...

It has been two-years since the S&P 500 bottomed in October 2022 and stocks began a new bull market. 

During this time, many sectors and industry groups have enjoyed tremendous uptrends while materials stocks have gone sideways.

But materials stocks are starting to look interesting...

The SPDR Materials Sector ETF $XLB is making new all-time highs:

As you can see, the prior cycle high coincides with a major Fibonacci extension level going back to the Great Financial Crisis, which adds to the significance of this breakout.

This market-capitalization weighted fund has a large exposure to Linde $LIN amongst several other bellwether materials stocks.

We want to be long XLB if it's above 93, with a target of 139.

The Materials Sector holds a lot of the same stocks as the S&P Chemicals Index:

The S&P Chemicals Index is consolidating below a major Fibonacci extension level going back to the Great Financial Crisis and we're betting it will breakout to new all-time highs like XLB.

If CEX is above 985, the path of least resistance is higher toward 1,500.

Representing over 17% of the Materials Sector...

Whether markets are full of chop or trending higher, bonds offer a versatile haven for our portfolios.

Take a look at inflation-protected securities, commonly known as TIPS. 

In inflationary environments, these outperform the government bond market.

We think it’s happening now and our intermarket analysis is telling us to buy TIPS.

If you take a look at the chart of the TIP ETF against the 10-year bond ETF, you’ll see consolidation above long-term support. One thing we know about these kinds of consolidations is that they tend to follow through in the direction of the primary trend. 

The trend for TIPS relative to treasuries is higher. 

Historical perspectives, like those found in Jack Schwager’s classic Market Wizards, can offer essential guidance on how to navigate through inflationary periods. I think this is where things are headed.

One effective way to thrive through inflationary periods is by diversifying your portfolio with assets like TIPS (Treasury Inflation-...