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Small-caps Do The Running Man

March 12, 2024

The Small-cap stock indexes haven't been able to make any progress all year.

But not every Small-cap Index is created equal.

Let's take a look at the two most popular:

Russell2000 Small-cap Index & S&P600 Small-cap Index.

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The Minor Leaguers (03-11-2024)

March 11, 2024

From the Desk of Steve Strazza @Sstrazza

Welcome to The Minor Leaguers.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list now, a company must have a market cap between $1 and $4B.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to...

[Options] Buy the Biotech Sector

March 11, 2024

Steve Strazza and I hosted another Flow Show today on Stock Market TV and discussed opportunities in the Biotech space.

Starting at an index level, we see that biotechs are clearing a base and appear set on breaking out:

From there, we started diving into some individual biotech names to play the breakout, but many of the charts offered unique challenges that made it tricky to pick one to take the most advantage or the sector breakout.

So when that happens, sometimes the best move is simply to buy the index!

And that's what we're going to do here, using the sector ETF $XBI as a vehicle for expressing our bet.

Here's the Play:

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Gold Breaks Out, Mining Stocks To Follow

March 11, 2024

From the Desk of Ian Culley @IanCulley

Gold is silencing all the haters – even me!

I’ll admit, I had my doubts. 

But I also carried an unnerving suspicion buyers would strike as soon as I dropped my guard…

Gold futures sliced through our breakout level last week, closing at record highs:

 

Unbelievable Or, better yet, undeniable.

Gold not only hit a new all-time high, it broke out with authority as it gained more than 4% last week. 

The path of least resistance points higher toward 2,500 (our initial objective). But the price of gold could go much higher.

Gold is embarking on a new secular bull run:

 

As it rips to new heights, it will take the entire metal and mining space along for the ride.

But we’re in the early innings of an uptrend that could last for years to come.

Instead of catching falling knives or taking cute catch-up trades, it’s best to simplify our strategy and buy the strongest names. 

Gold mining stocks have suffered for years, and a handful of names were absolutely clobbered last month. A few gold miners are even offering up the mother-of-all mean...

Dow Theory Divergence 2024

March 11, 2024

Stocks are down again to start the week.

All of this while Bitcoin is making new all-time highs this morning:

BTCUSD: $72,000

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Meanwhile, there's a Dow Theory Divergence that continues to cast a huge cloud over the US Stock Market.

We saw the exact same divergence just before the Covid crash.

Notice how the Dow Jones Industrial Average is making new highs, but the Dow Jones Transportation Average is nowhere near new highs.

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Monitoring Bitcoin's Downside Risks

March 10, 2024

As Bitcoin approaches its previous all-time highs and our primary long-term target, we remain vigilant regarding several developments that may prompt a shift towards a more tactically bearish outlook. Amidst these considerations, it is imperative to prioritize money flow over subjective opinions, allowing it to guide our execution.

It's a Bull Market For Gold

March 10, 2024

Did you see Gold break out to new all-time highs?

These are the highest prices ever for Gold, in all of human history.

But if you're paying attention, you'll notice how Gold prices move first, and then Bitcoin follows:

Time To Bet On The Bull

March 9, 2024

The stock market feels heavy.

The majority of stocks are having a hard time making new highs.

Some of the largest Technology and Consumer Discretionary stocks keep breaking down to new lows.

So let's check in on how the journalist community feels about the current market:

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Catch Copper on the Breakout

March 8, 2024

From the Desk of Ian Culley @IanCulley

Gold is up for the sixth day in a row – and it looks like this week’s breakout might be the real deal.

If it is — and gold continues to rip — it’s only a matter of time before copper breaks out too.

Check out the overlay chart of gold and copper futures:

Where gold goes, copper follows. Or perhaps they simply enjoy similar paths.

The rhyme or reason makes no difference. During a commodity bull run, precious and industrial metals will enter a broad markup phase. Gold will not take off on a rip-roaring rally without copper by its side.

I placed a question mark above copper’s former resistance level, marked by the 2011 and 2022 highs. To be clear, the annotation poses the question of when — not if – copper will resolve higher.

But before Dr. Copper can break the psychological...

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The Hall of Famers (03-08-2024)

March 8, 2024

From the desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

*Click table to enlarge view

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month.

Then, we sort the remaining names by their proximity to new 52-week highs.

This leaves...

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Investors Load Up on Emerging Market HY Bonds

March 8, 2024

From the Desk of Ian Culley @IanCulley

A risk-on revival has captivated the markets.

Investors are rising to their feet…

They’re buying stocks. They’re buying crypto. They’re buying gold.

Hell, they’re even buying high-yield Emerging Market bonds!

Check out the Emerging Market High Yield Bond ETF $EMHY breaking to a new multi-year high:

I throw this EMHY breakout into the same camp as the Biotech ETF $XBI blast offrisk-on.

It’s downright impossible to hold a bearish outlook while investors dance with the riskiest bonds on offer.

If you actively trade bond ETFs, you gotta be long EMHY above 37. For me, the EMHY breakout isn’t a trading event. 

Instead, it’s all about the behavior behind...