Every now and then I come across a chart that I feel the need to send over to our friends at the CMT association.

The curriculum covers all sorts of pattern recognition and analysis. While things don’t always work out the way the textbook teaches… sometimes, they do. And it’s just so lovely to see. 

It’s happening now with the recent action in Bank OZK. Both of these flag pattern breakouts are picture perfect.

Let’s use this chart as an example to discuss the classic continuation pattern.

Price was coiling in a bear flag coming into the year. 

The only difference between the first flag and the second flag is the trend that preceded them. When the trend that leads into the coil is down, it is a bear flag. When it is up, like it is now, it is a bull flag.

Another difference between the two formations is the way that they resolved. The bear flag resolution is actually considered a failed pattern as it resolved in the opposite direction of the downtrend that preceded it.

Failed patterns are some of the best patterns though. As...

Speculative themes have been the best trades on the tape for the past six months. 

We’ve been tracking American eVTOL stocks for a few months, noting the aggressive primary trend reversals in many of the names in the space. 

With China shaping up, one stock we’ve kept on our radar is EHang $EH. 

One of our scans picked up an unusual volume splash today in the March 21 $21 strike calls. And we love the chart, so we’re in:

With volatility compressed and with volume and momentum coming into EH in a big way, we want to make the bet this base resolves higher. 

A trade like EH has the potential to become a multibagger. 

Not only would a quick pop get us a double, but it would also complete this multi-year basing pattern which could...

Before I get to today's Options Jam Session, I want to talk about profiting from bearish moves.

Short answer: It's a hell of a lot harder than it looks.

Few people (with the exception of traders holding short positions) hate it when stocks go up. It is human nature to expect stocks to go up. When stocks are going up, everything is "normal." There's no panic. There are no investor lawsuits. There are no board room freak-outs. Everyone is making money, everyone is happy. Carry on.

But when stocks are going down, people get mad. They look for someone to blame. Big shareholders and institutions start looking for malfeasance and an angle to sue the company for fraud. Star employees get frustrated and leave for greener pastures. Customers lose confidence in the company and start exploring other options. Borrowing costs get more expensive. It gets harder to raise capital in the public markets.

All kinds of bad things happen when stocks go down. So companies deploy all kinds of weapons (some legal, some questionable) to try to stop the stock from going down. They issue buybacks. They issue bullish press releases. The executives go on TV and...

Here's the replay and chartbook from the February 6 Weekly Strategy Session.

Be sure to join us on Thursdays at 11 am ET and maximize your return potential.

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

1. New position in EEM.
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

We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.

However, when it comes to this one, it couldn't be any simpler!

With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.

Welcome to The Junior Hall of Famers.

This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.

The bottom line is it is a bull market. We...

Starting 10 pick Peloton beats, raises and posts 4th straight quarter of cashflow. Letting the shares ride.

We just got some interesting insider action from a few big names. Let’s break it down.

Control Empresarial de Capitales S.A. just dropped $1,098,968 on a fresh PBF Energy $PBF buy.

This firm, linked to Mexican billionaire Carlos Slim, has stakes in everything from energy to media. When they make a move, it’s worth watching.

Here’s The Hot Corner, with data from February 5, 2025:

Long Focus Capital Management is taking a big bite of Herbalife $HLF with a 5% stake.

This hedge fund manages over $666M, with major positions in Comcast $CMCSA, Alibaba $BABA, and Intel $INTC.

Last but not least, James W. Ayers, the Executive Chairman of FB Financial $FBK, just bought 4,000 shares of his own company.

Today's number is... 517

The Equal Weight Consumer Discretionary vs Equal Weight Consumer Staples relative ratio has been in an uptrend for the past 517 trading days.

Here’s the chart:

Let's break down what the chart shows:

• The black line in the top panel represents Equal Weight Consumer Discretionary vs Equal Weight Consumer Staples relative ratio (If the ratio rises, discretionary stocks are outperforming staples; if it falls, staples are outperforming discretionary stocks.)
• The blue line in the top panel represents the 50-day moving average, while the red line represents the 200-day moving average.
• The black bars in the bottom panel indicate the consecutive days when the 50-day average is greater than the 200-day average.

The Takeaway: If you've been following me, you probably already know that I define an uptrend as when the 50-day moving average is above the 200-day moving average. I like to keep things simple and avoid complicating things.

This ratio is one of my favorite Risk-On/Risk-...

The monthly strategy session has always been one of my favorite things we do here at All Star Charts. I’ve been watching these calls for like ten years now. Since long before I worked here.

They are a huge part of my process. 

So, when I got the call from JC on Monday, I was pumped. It’s always an honor.

Not to mention, there’s so much to talk about right now… from some major intermarket developments to the expansion in participation for global equities and commodities. We covered it all. 

If you missed the call, you can rewatch it here.

If you are not a member of ASC premium, you can sign up here and get access.

And for the rest of you, here’s one of my favorite charts from the slide deck:

This is a custom equal-weighted index of some of the absolute worst...

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...