We continue to see small caps stuck deep in the red, while large caps remain firmly in the green.

This isn’t surprising — it’s part of a well-established secular trend — but it’s worth highlighting again.

Small Caps ($IWM) look terrible, and there's little hope for a turnaround anytime soon. Just look at how brutally the small-cap ratio has been crushed.

Even with money flowing out of growth stocks — the very names that drive the large-cap indexes — small caps are still breaking to new lows.

If they couldn’t outperform when tech was getting hit, what are the odds they’ll ever outperform?

It's a bleak outlook for America's small stocks.

Sign up for my free note here.

While markets have been volatile over the past few weeks, these turbulent periods often present the best opportunities to identify future leaders.

When the market’s under pressure, I’m always looking for the names that refuse to go down.

That’s what relative strength looks like.

It’s called the Beachball Effect.

Picture a beachball underwater — no matter how hard you push it down, it just keeps fighting to pop back up.

And when the pressure lifts, these are the names that tend to rip first — and rip the hardest.

To help visualize this, we built a table combining two factors:

🔹Stocks currently in a bullish momentum regime...

The bulls are saying its global rotation, and the bears are saying it won’t work without US stocks.

Both takes make sense. But, they’re just takes. 

Here’s where we are…

Stock markets around the world experienced fierce selloffs back in March. 

Then in April, this bearish action was followed by some of the most historic rallies in recent history.

There was broad participation to the downside. And now we’re seeing the same in the opposite direction. We’re in the middle of a synchronized global rebound rally.

And every country, region, factor, sector, and industry group looks different. They all come with their own unique characteristics in terms of how much they sold off, how resilient they were, and now, how strong they are, measured by the bounce.

So, while some things obviously look better than others, and some groups still look...

Spotify ("The Swedish Netflix") reports, essentially while we are sleeping tonight. The Podcast King is expected to to report revenue growth of about 20% at $4.6b and earnings of $2.52-ish or more, which is a growth rate too large to really delve into here. Not because it isn't impressive but  because I don't think it matters all that much what Spotify reports as much as how they guide.

Spotify isn't cheap for the best reasons. 1. The company is now printing money and utterly indispensable to ~265 million people worldwide. 2. There isn't (yet) a tariff on steaming stuff 3. Spotify is a global brand, generating more than half its revenues from "other countries" (there are apparently consumers in non-America, I'm having a team look into it).

While we're pie-charting let's add this:

That's Spotify's revenue breakdown on advertisements vs subscribers. Combine those two ChatGPT-generated charts and my hand-written efforts and you know why Wall Street was comfortable bidding SPOT up 33% YTD while the rest of the world burns:

• Ads are flaky but Subs stick around. This is a big part of a lot of my investment thesis this year. I think...

Do you remember when The Economist magazine cover had a rocket ship covered in United States dollars last year?

They said the United States was "The envy of the world."

It was so cringe...

The dollar got blasted over the next several months, and the U.S. stock market had its worst quarter in decades relative to the rest of the world.

Like any other type of market analysis, fading magazine covers is more of an art than a science.

We don't want to fade a trend just because there's a magazine cover.

The dollar was extremely overbought in the prior example, and the COT positioning tipped us off to a potential move in the opposite direction.

We waited for the market to confirm our bias, managed our risk, and made a ton of money.

Fast forward to today, and the latest Barron's magazine cover highlighted a stack of Gold bars and said:

"Investors are loading up on the metal as a haven in chaotic times. How long can it last?"

This comes as Gold futures are running into...

As the dust settles on Liberation Day the Street is starting to pick through the rubble and getting long stocks just in case the world doesn't end.

Consider On Holdings, the Swiss shoe and athletic concern. Shares are popping on a down day thanks to a couple upgrades. The gist of both is something I wrote about the company last March; On is taking market share, expanding across the globe and generally speaking the hottest brand going, at the moment.

That's the view of me, Citi, UBS and about 75% of the fashionable people I run into at our over-priced health club. It's also something noticed by Mrs. JC Parets, and Mrs Jeff Macke; two solid sources on such matters.

On vs Skechers

Being hot is the ultimate tailwind for a consumer brand. Given the headwinds of the moment (tariffs based on trades between the US and anywhere else), it doesn't hurt On to be a Swiss based company doing a lot of business in Europe and on the other side of moving a good portion of production from China to Indonesia and Vietnam.

Skechers,...

This weekend, I shared a story about a young woman who asked me how she could set herself up for future financial success. I told her that the best education comes from living life fully—scars, stories, and all. Your response to that post was overwhelming, and I’m grateful for the thoughtful feedback. Today, I want to highlight one reader’s note that struck a chord and dive deeper into what it means to embrace our “life education.”

A reader, Julius, wrote to me with this reflection:

I agree with you about life. From my experience and perspective, the greatest education doesn’t come from school, books, courses, or TED talks but from living life to the fullest…

As you stated, the best education comes from the life you have lived and the scars to show for it. Then you’re left with the story to tell about it. Years ago, I stopped thinking of those scars as mistakes, failures, or regrets. Instead, I think of them all as outcomes…

Had I kept beating myself up over all my so-called mistakes and failures,...

The chart we are analyzing is the US Dollar Index (Monthly) going back 30 years.  

Pay close attention to the solid blue measured move as that represents the largest correction since the Dollar's bull run in 2008. 

Additionally, if you go back beyond 2008, you will see that the 'solid blue arrow' has been very harmonic, representing almost every move lower.  The other arrows are simply harmonics of the blue.  Additionally, notice the 14 period RSI.  We are approaching/at a VERY key support level on the RSI.  Finally, we hit the .382 from the USD all time low and have a classic polarity play all at the same level. 

Technically, the bounce in the USD dollar makes sense.  

Is this the beginning of a move higher for the USD or a "dead cat bounce?" Time will tell.  The 'monthly' candle coming into this level is big and w/ a lot of volume - this warns this level will give away, eventually.  And, right below it, is a projection target at 95.

In this 'new world order' (debatable) currency flows are everything.  Pay attention to the USD and the heavyweights out there - the Pounds, the Swissy, the Yen...

Today's trade is in a name that has been on my radar for a couple of weeks. I've been waiting for a trigger. And today, we're getting it.

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 April 25, 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.

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

1. No new positions today.
2. Rolling ARKK into June options.
3. Closed XLP at profit target.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

The largest insider buy from today’s list comes via a Form 4 filing by Catalys Pacific Fund LP.

The hedge fund revealed an acquisition of 259,259 shares of Mineralys Therapeutics, equivalent to $3.5 million.

RWWM Inc disclosed initial ownership stakes in Fox Factory Holding Corp $FOXF and Carters Inc $CRI through the filing of two 13Gs.

Here’s The Hot Corner, with data from April 25, 2025:

Click the table to enlarge it.

Executive Vice-President and COO Nick Hobbs bought 3,038 J.B. Hunt $JBHT shares, equivalent to $399,746.

JBHT is a core Dow Transports component, so a leadership buy here is worth a second look, especially with freight stocks trying to claw back momentum.

President and CEO Justin L. Jude,  just put $100,000 of fresh money into auto-parts giant LKQ Corp $LKQ.

Jude is making his first open-market buy since LKQ’s correction began.

Not all double beats are created equal. Just ask T-Mobile US $TMUS...

The wireless giant delivered a double beat this quarter, topping both revenue and EPS expectations. 

Revenue hit $20.89 billion, and EPS came in at $2.58, both ahead of analyst estimates. 

By the numbers, it was a clean win.

But the market had other plans...

Despite the strong report, T-Mobile stock got crushed, falling over 11%. This was the stock's worst earnings-day reaction in company history.

Why the disconnect? 

Investors zeroed in on softer guidance for 2025, lingering concerns around customer growth momentum, and heavier competitive pressure in the wireless space. 

Good results simply weren’t enough to outweigh growing forward-looking anxiety.

Strong fundamentals, terrible price action: not the combo bulls want to see. 

When a name sells off this hard on good news, it’s a clear signal that something bigger is bothering the street.

This is the kind of stock that we want to sell.

So what else did we learn from Friday's earnings reactions? Let’s dive into the details.

Today's number is... 100%

100% of the major indices I track are trading back above their key shorter-term moving averages.

Here’s the table:

 Let's break down what the table shows:

The first column of the table lists several major indices. Each subsequent column represents a different moving average, ranging from the 5-day average to the 200-day average. A green highlight indicates that the index price is above the particular moving average, and a red highlight shows that the index price is below that moving average.

The Takeaway: Last week, I noted that the ongoing weakness in the stock market could result in further declines if the bulls didn't take action quickly. Fortunately, the Bulls did respond and made some progress, as there are now signs that the downtrends at the index level are beginning to reverse on a shorter-term basis.

The way I learnt it was that nothing good happens when the price is below the moving averages. 

So, seeing these major indices rise back above their 5-day, 10-day, and 20-day moving averages is an...

The S&P 500 keeps falling in our power rankings as global markets have shown resiliency.

The longer-term picture for international is becoming more apparent; favorable valuations, diversification away from growth, and momentum that's capturing the attention of traders.

In 2025, international has smoked the U.S. The ratio below tracks Vanguard's All World Ex US ETF $VEU relative to the U.S. - when it's moving higher it shows that international is outperforming.

There is an argument to be made that this trend is extended in the near-term and we could see a temporary rotation back into U.S. growth as markets find their footing following the tariff fiasco.

But the bigger picture is that evidence is mounting we're in the early stages of a reversal in U.S. dominance that's been present for the last 15 years.

Shall we expect more red from the U.S. moving forward in our rankings?

We think it'd be wise to start thinking seriously about this outcome.

We’re seeing an increase in risk-on behavior as markets begin to stabilize from the recent correction. This shift is especially evident on the international stage. And while the U.S. has been more of a laggard in comparison, there are still compelling opportunities emerging.

Gold miners, for example, continue to show relative strength — as confirmed by the latest power rankings.

At the same time, certain pockets of growth that were hit hardest are showing signs of life. Cybersecurity ($HACK), for instance, has successfully retested its 2021 highs — much like the major U.S. indices — and is beginning to set up constructively.

This signals a broader transition from risk aversion to opportunity-seeking. As more corners of the market find their footing, we expect leadership to broaden.

Risk-on themes continue to rank high on our power rankings, with funds like China Technology ($CQQQ), Momentum ($MTUM), and Robotics ($ARKQ) all showing notable relative strength.

But the standout performer remains the VanEck Video Gaming ETF ($ESPO), which has held the top spot for some time now.

Just look at the consistency—this fund has been delivering strong performance week after week.

A closer look at its components reveals some incredibly strong charts that are driving this impressive trend.

Yesterday, I was flat on my back, getting professionally stretched, my body creaking like an old door. It’s a bi-weekly ritual I lean into hard—it keeps me flexible, and helps me heal from years of grinding through life’s chaos. The woman working me over, a 24-year-old just starting her career, hit me with a question out of nowhere: “You’ve been around—what’ve you done to set yourself up financially that I should know?”

I laughed. A real, barking laugh.

“You’re asking me? You think I’ve got my shit together?” Her question caught me off guard, like a jab to the ribs. I’m no sage. My financial path looks more like a drunken stumble than a victory lap.

All I could give her at the moment was a half-assed list of regrets. “Here’s what I didn’t do,” I said, my voice trailing off. Don’t skip saving early, even if it’s just a few bucks a month. Don’t bet big on “sure thing” investments that crash and burn—I’ve got scars from those. Don’t let pride stop you from asking for help when you’re drowning...

It wasn’t the TED Talk she deserved. It felt like I was reading my failures out loud, each one a reminder...

The Fed doesn’t set the tone. It reacts to it.
 Always has. Always will.

This week, Waller gave the usual hint:
 "A serious drop in the job market could prompt more cuts, sooner."

Translation? The Fed knows it's behind. The bond market figured it out months ago.

The real story is written in the chart.
 The 2 Year Treasury Yield is the market’s forward looking Fed whisperer.
 Every cycle, the 2 year tops first. Every cycle, the Effective Federal Funds Rate follows like a lost puppy.

• When the 2 year peaks and rolls, the Fed has no choice but to cut.
• Markets aren’t asking politely for cuts — they’re already forcing them.

Right now, the  2 year is falling hard. That isn't a forecast.
 It’s the bond market screaming: "You're done here."

It’s not about what Powell...

 A tribute to ASC Gold Rush's standout setups

Great trades never ring a bell. They don’t come with fanfare. They come wrapped in uncertainty, quiet conviction, and a little discomfort. That’s how you know they matter.

Take Cocoa futures. One of the cleanest breakouts we’ve seen recently, but it didn’t feel clean until after it moved. 

Before that, it was all noise and indecision.

Here’s the setup we outlined in October 👇

We were betting that the breakdown to new lows wasn’t going to stick.

Why? The 14-day RSI was firmly in a bullish momentum regime. 

That’s a characteristic of an uptrend… Not a downtrend!

Moreover, this was a textbook consolidation after a historic 190% bull run which unfolded over 4 months.

Here’s how the setup unfolded 👇

The price ripped back above support and hit our target at the upper bound of the range in just a few weeks.

It was an epic bear trap…

Admittedly, this worked much better than we expected.

We...