Another Santa Claus Rally is officially in the books.

This year the S&P500 rallied 0.80% during the period, which is more than 3 times the historical returns for all the other 7 day periods throughout the year.

You can learn more about the SCR in this note from last month.

OK so great, Santa showed up. So what?

The next new position in our Paid-to-Play portfolio is:

We've said it time and time again.

It's all about the US dollar!

When did the NYSE new highs list peak? When the dollar bottomed...

When did equities bottom? When the dollar rolled over...

It's not rocket science.

I don't care why it's the case because the correlations are so evident. It's a fundamental reality in this tape: A weak dollar is positive for stocks and crypto, while a strong dollar pressures those assets.

Now, consider: What have been the defensive assets in this market?

The Japanese yen? Nope.

Gold? Not until recently.

Bonds? Hell no.

Whenever shit's hit the fan, that money has flowed into the US dollar.

It ain't rocket science, folks.

From the Desk of Kimmy Sokoloff

Futures are up a tad this morning.

What I'm looking for is $SPY to push past 386 and head to 387.80.

Support is at 382.70.

Today’s Hot List is a short one.

The only 13D on our list was filed by Impactive Capital LP, which revealed an increase in ownership from 7.20% to 7.50% in Envestnet $ENV.

From the Desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing this is by identifying 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...

From the Desk of Kimmy Sokoloff

Overall it was a decent day for the indices, considering we had data out at 10 a.m. ET and then FOMC minutes at 2 p.m.

I'd still like to see the indices trend higher. Specifically, I'd like to see $SPY 387.80.

This is the video recording of our January 4, 2023, Inside Scoop Weekly Strategy Session.

Happy New Year everyone. How are you playing it?

This morning, our analyst team was bouncing ideas around when I posed the group this question:

"It's the beginning of a new year. Do we want to continue buying strength (as we have been)? Or do we want to buy some well-selected dips on stocks in sectors we like?"

In other words, what's our appetite?

The prevailing sentiment that won out was that we have been buying strength -- and that has worked well in some areas, particularly homebuilders, Chinese stocks, and metals stocks. But the reward-to-risk opportunities right now may be more favorable in the "buy-the-dip" camp.

So with this in mind, let's take a look at a stock in the semiconductors sector that has our attention.

We've adjusted a position in the Paid-to-Play portfolio today:

Doing some basic math, the odds continue to favor a strong year for stocks in 2023.

There are some people out there who think the Nasdaq is the stock market. There are others who "only buy growth stocks".

I don't know what kind of masochist you need to be to think that way, but both of those are very foolish approaches to life.

The Nasdaq is full of growth stocks. And growth stocks historically underperform and make little progress when interest rates are rising. I'm not sure if you heard, but interest rates have been rising!

Since the Stock Market bottomed in June, the majority of stocks and sectors are up and to the right. It's only the biggest losers that are down, and there aren't that many of them. It's really just those nasdaq / growthy stocks that the masochists are focused on.

Make no mistake: Volatility is around the corner.

While price action is trending in nature, volatility mean-reverts. Periods of low volatility precede volatility expansions and vice versa.

So, where do we find ourselves today?

Bitcoin's price stability is at its third-highest level in the last five years.

Have you noticed?

Crypto volatility has completely died off. You'd probably get more juice trading the equity indices than shitcoins these days.

These extremes in volatility -- or lack thereof -- don't last long.

So, we're placing a high likelihood that Bitcoin will make a decisive move in the coming weeks.

And how are we looking to profit from this upcoming move?

The largest insider buy on today’s list comes in a Form 4 filing by the president and CEO of CarMax, Inc $KMX, William D. Nash.

Nash disclosed a $501,255 purchase of KMX shares.

From the Desk of Kimmy Sokoloff

S&P futures are indicating at the 3,850 mark.

We need to maintain that level in order for this index to head higher.

We retired our "Five Bull Market Barometers" in 2020 to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

This week we're looking into Automobile Sector.

This is the video recording of our January 3rd Monthly Charts Live Strategy Session

It's the 2023 inaugural weekly currency edition of What the FICC?

And we're kicking it off with the US Dollar Index $DXY!

Check it out!

From the Desk of Ian Culley @IanCulley

I’m not big into seasonality.

I pay attention to it, of course. But it’s not in my top three data points after price. 

Don’t get me wrong, seasonality brings context and enhances awareness of any given market – which should be a priority for any trader or investor.

I have multiple almanacs on my desk, including the Stock Trader’s Almanac by Jeff Hirsch and Christopher Mistal and the Spectra Markets Trader Handbook and Almanac by Brent Donnelly and Justin Ross.

...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we’re currently seeing in asset classes around the world.

New Relative Lows for Growth

The relationship between growth and value has leaned heavily in favor of cyclical stocks as we see fresh new lows in this ratio. As long as this downtrend is intact, the best course of action is to remain overweight value-oriented areas and stay away from growth.

From the Desk of Kimmy Sokoloff

We saw a nice pop in the morning and then a hard fade pretty much right after the market opened. Feels like a repeat of last year.

The market did try to hang on to the $SPX 3,800 level most of the day. It's all about this level right now; a true break below and we can see 3,780.

We need back above 3,840 for a rally higher.