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

1. New position in SMH (Semiconductors).
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!

Bitcoin Dominance just hit new multi-year highs this week.

In other words, the market-cap of bitcoin as a percentage of total crypto market-cap is the highest it's been in years.

What this means is that the value of Bitcoin today (~ $1.2 Trillion) represents 58% of the value of all the Cryptocurrencies in the world (~ $2.1 Trillion).

And the trend here of Bitcoin continuing to eat into market share continues to move up and to the right:

Meanwhile, Microstrategy is hitting new highs relative to Bitcoin since it first started buying Bitcoin back in the Fall of 2020.

Microstrategy is the 5th largest owner of Bitcoin, holding about 1/4 of the position of Bitcoin's creator Satoshi Nakamoto. 

Just to clear up any confusion, I am absolutely NOT Satoshi. I know it would be a lot cooler if I was. But I am not. Sorry to disappoint. 

Now, what I love most about the Microstrategy $MSTR hitting new highs relative to BTC, and also hitting new All-time highs on an absolute basis, is that the "fundamental" guys can't wrap their heads around the premium that $MSTR trades relative to its total ownership of BTC.

People tell me that...

The most notable insider activity on today's list comes via a 13D filing by Baker Bros Advisors.

The hedge fund increased its ownership stake in Kiniksa Pharmaceuticals $KNSA from 6.94% to 7.70%.

Baker Bros' top holdings include BeiGene, Incyte, and Acadia Pharmaceuticals. These three positions represent roughly 50% of its portfolio.

We keep a close eye on what Baker Bros is up to -- the firm is better than anyone when it comes to biotech investing. It has a knack for spotting early-stage winners and sticking with them. 

Its increased stake in KNSA means Baker Bros thinks this one will be a winner in the future. 

We agree.

Here’s The Hot Corner, with data from October 8, 2024:

Crypto is shaping up.

As such I'm taking more trades.

Here are three crypto stocks I like.

In bull markets, you gotta go for it. 

Tops fail, continuation patterns resolve higher, and a growing list of stocks complete reversals. This is what bull markets are made of.

It’s also what’s happening now. 

So, I’m looking to add exposure to the best setups.

Over the years, I’ve developed a system for this. It’s more of a portfolio sleeve than anything.

I call them kickers. I think of these trades like the cherry on top of a perfect carvel sundae. You don’t need it, but it makes it that much sweeter.

Let’s talk about what I’m talking about…

Robinhood completed a textbook trend reversal earlier this year. It hit a target or two, and then it started ranging.

In my long-term account, I’m longing common stock as soon as I see a valid reversal. This happened in February and is shown on the chart...

Let's all raise our glasses for a toast to the outperformers of this bull market.

Ok, now let's get to work finding stocks setting up that will likely catch the next wave of rotating capital flows.

Today's trade is in a name that is slowly becoming a fixture at just about every eating establishment near me, and likely you too.

Here's a one-year chart of Toast Inc, $TOST:

By itself, this is a chart I Iike to buy. But Strazza shares a longer-term chart in the video above that displays the opportunity better.

$TOST is just now showing signs of breaking out of a multi-year base.

But when there is overhead supply to contend with, the breakouts aren't always as clean as we'd like them to be. So we will take advantage of options premiums at out-of-the-money strikes to help keep our cost of participation limited.

Here's the Play:

I like buying a $TOST March 30/40 Bull Call Spread for approximately $2.50 net debit. This means I'll be long the 30 calls and short an equal amount of the 40 calls. The most I can lose is the premium I pay today. And that could be a real possibility if we get a...

Technology stocks have been underperforming for the last three months.

However, when I dive beneath the surface looking for relative strength, software stocks catch my attention.

Here you have the Software ETF $IGV on the cusp of breaking out of a massive base.

IGV soared higher, tacking on 2.14% today as it pierced through the upper bounds of this range.

If and when we get some upside follow-through, the breakout will be valid and the path of least resistance will be higher. We think this happens in the coming days and weeks.

Under this scenario, we should anticipate upside resolutions from individual software names. A lot of them look very similar to IGV right now.

Palantir Technologies $PLTR is one of my favorites setups in the space.

How could it not be? It's been the best one.

The notorious government contractor is just breaking out above its IPO high from 2021.

It has a lot of room to run.

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

1. New position in KRE (regional banks).
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

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. 

Setups that will turn into 5x, 10x, and 20x winners during earnings season are forming right now.

You're seeing that normal directionless consolidation that develops before explosive moves.

Our proprietary Breakout Multiplier System is specially designed to identify these stocks before volatility begins to expand.

The time to enter is now.

...

The most significant insider activity on today's list comes via a 13D filing by Mubadala Investment Company.

The sovereign wealth fund, which manages a portfolio for the government of Abu Dhabi, reported an initial stake of 9.50% in Equinox Gold Corp $EQX.

The fund's top holdings include GlobalFoundries and Evotec SE.

It’s not uncommon for insiders to buy stocks when they’re still in the accumulation or base-building phase. We see them buy downtrends and beaten-up names all the time as well. 

What we don’t see as much is insiders stepping in and reporting a brand-new stake just as a fresh trend reversal is shaping up.

That’s what is happening here with EQX and Mubadala’s $230 million investment.

Here’s The Hot Corner, with data from October 7, 2024:

JC has been giving a special mastermind class on Technical Analysis, and last week he invited me on to discuss momentum thrusts and crossovers. You can watch it here.

We dove into a variety of topics, covering initiation vs exhaustion, thrust clusters, and even a conversation on the difference between MACD and PPO.

One of the points I hoped to drive home in this presentation was around how to know when a momentum thrust is significant. 

For me, momentum thrusts and breadth thrusts are exactly the same in this way. When they are notable, they are hard to miss. They come in spurts and clusters.

What do I mean by this?

Let’s use China as an example because I think we are witnessing a historic initiation phase right now.

A few weeks ago, Chinese stocks had their second-best day in history. 

Then, they had...

A couple of weeks ago, we talked about Silver futures attempting to emerge from a multi-year accumulation pattern and potentially retesting the former all-time high.

Last week,  Silver made a new multi-decade high in absolute terms and broke a multi-year downtrend line relative to Gold. 

And if the 47th element is about to blast off, we should look closer at the Junior Silver Miners.

But first, check out this chart of the Silver/Gold ratio:

Below is the 4th ASC Mastermind Lab Course. These are special videos that will be made available throughout the duration of the 12-week course featuring conversations with professionals from across Wall Street discussing topics in their expertise. 

The theme of ASC Mastermind Week 2 is momentum trading, and why it works. So naturally it made sense for me to talk to All Star Charts Director of Research Steve Strazza. Steve uses momentum as much in his day-to-day as I do. 

The main concept Steve wanted to hammer home is momentum thrusts, what they are, when they happen, the different types with examples, and how to analyze them. 

Enjoy this Mastermind Lab Course on momentum.

Earnings season is closing in. And the election is right behind it. Surely land mines will be discovered all over the place. There is risk.

So any directional bets I place over the coming weeks will be of a defined-risk nature.

But, where there is risk, there is opportunity. We'll get paid when we're right, perhaps handsomely so.

That is why it is worth wading into the rising rivers here to take some shots while keeping our downsides in check.

Today, I joined my friend Patrick on Chart Request Live, discussing all the ticker symbols from the chat.

Click here to watch the replay.

One major topic we discussed at the end of the show was crypto and some equity vehicles to gain exposure to it.

One that stood out was MicroStrategy $MSTR, which continues to show impressive relative strength.

As you can see, MSTR is consolidating above its prior cycle peak as it flirts with new all-time highs.

Meanwhile, Bitcoin continues...

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

1. New position in XLP (consumer staples).
2. No adjustments are needed today.
3. Exited SMH position.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!