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

1. New position in XME.
2. No adjustments are needed today.
3. Exited XLI at our profit target.
4. Current status of open campaigns.

Let’s dig in!

Just a few months ago in March, it took an investor 34 ounces of Gold in order to purchase 1 Bitcoin.

By last night, that number was all the way down to only 25 ounces of Gold necessary to buy 1 Bitcoin.

Here's what the ratio looks over time. In other words, here's how much "Real Gold" it costs to buy "Digital Gold":

From the Desk of Steve Strazza and Alfonso Depablos

The most significant insider buy on today's list comes via a Form 4 filing by Charles Bartlett Johnson, former CEO of Franklin Resources Inc $BEN.

Johnson bought 200,000 additional BEN shares, equivalent to $4.5 million.

Point72 Asset Management filed a 13G for UroGen Pharma Ltd $URGN revealing an initial stake of 6.20%.

From the Desk of Ian Culley @IanCulley

Precious metals bulls are taking a stand.

It’s easy to overlook following Friday’s selling pressure.

But price is respecting critical support levels for gold, platinum, palladium, and even gold’s crazy cousin.

From the Desk of Ian Culley @IanCulley

Precious metal bulls are taking a stand.

It’s easy to overlook following Friday’s selling pressure. But price is respecting critical support levels for Gold, Platinum, Palladium, and even gold’s crazy cousin.

In today's Flow Show, Steve Strazza highlighted the strength we're seeing in the homebuilders sector. I immediately liked it because I don't have any homebuilding stocks in my portfolio, which needs to be corrected.

Last week, Lennar Corp $LEN released earnings, and the market pretty much yawned. I like that. Because the other name that we liked better -- D.R. Horton $DHI -- hasn't yet released earnings (scheduled for July 18th) and unless they come out with something truly shocking, my bet is the market will be similarly unfazed. This tells me there's an opportunity to take advantage of some overpriced options premiums currently being bid into $DHI options.

We like $DHI to make a run back to all-time highs, and we want to be long the November 170 calls. But we will sell some overpriced options to help us finance the trade.

Here's the Play:

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 June 21, 2024. 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.

Whether we’re measuring increasing interest based on large institutional purchases, unusual...

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

1. New position in XLP.
2. No adjustments are needed today.
3. Exited XME for a loss and XLB at profit target.
4. Current status of open campaigns.

Let’s dig in!

The U.S. Industrials sector represents one of the most important groups of stocks in the entire market.

So with new all-time highs in the S&P500 and Russell3000, then why are Industrials, who historically have the highest correlation with these indexes, not able to keep up?

Industrials are actually down over the past 3 months.

But the Aerospace & Defense stocks, that fall within the category of Industrials, continue to hit new all-time highs.

I reviewed the trade we discussed last week in today's note, but I think it's so important that it deserves it's own letter.

And that is the setup in Solana is ready. We're taking advantage of this weakness.

Much of our recent coverage has focused on the divergence between Bitcoin and altcoins.

While the former has barely sold off, there is a lot of damage down the cap scale.

People are frightened. People see red candles. People have forgotten what the bull market looks like.

And people are creating a lot of noise.

Our job at All Star Charts Crypto is to cut through that noise and to consider objective reality.

While people are giving up on these altcoins, our datasets point to downside exhaustion.

Consider, for example, the fact that we're seeing spikes in the number of cryptos hitting oversold conditions.

In the context of a long-term bull market, these periods have proven to be great times to be buyers – not sellers – of cryptocurrencies.

Heading into last week we were mindful of the compression in volatility which meant an increased likelihood for larger price swings. Further, we were being patient given a number of our data sets were pointing to mixed signs.

We've seen selling continue, particularly ramping up this morning.

From the Desk of Steve Strazza and Alfonso Depablos

Control Empresarial de Capitales S.A. has two significant insider buys on today’s list, as it continues to build positions in a pair of energy companies.

In a Form 4 filing, the Mexican company revealed another purchase in PBF Energy Inc $PBF, this time for approximately $24.6 million.

This is the sixth Form 4 filing they’ve made for PBF this month.

Control Empresarial also bought 300,000 shares of Talos Energy Inc $TALO, equivalent to $3,240,000.

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

From the Desk of Ian Culley @IanCulley

Mark it, dude.

We have another bearish divergence calling strike three on the stock market rally…

High-yield bonds $HYG versus US Treasuries $IEI.

Check out the HYG/IEI ratio (dark blue line) overlaid with the S&P 500 ETF $SPY:

We use the HY bond-to-US Treasury ratio to track credit spreads. When the dark blue line falls, credit spreads widen – a sign of dwindling liquidity and stress for the bond market (the world’s largest market).

Stocks tend to struggle as credit spreads widen. 

On the flip side, when these spreads contract (or the HYG/IEI ratio catches higher) stocks rally as capital flows into risk assets. That’s why these two lines trend together. 

Notice the HYG/IEI ratio and SPY bottomed last October before rallying into the spring, following a similar path to new highs. 

But while the S&P 500 hit another all-time high this week, the HY bond-to-US Treasury ratio peaked in late April.

Plus, bullish momentum is deteriorating:

...

This chart really stood out to me this week.

We just saw the Australian Dollar vs the Japanese Yen close at the highest levels since 2007.

So why investors care about the Aussie/Yen cross?

Because look how it trades with commodities...

From the Desk of Ian Culley @IanCulley

Cattle futures are defying gravity.

Unlike most commodities during this cycle (pick your favorite base metal or grain contract), cattle have yet to correct lower. 

Instead, they’re still hanging around new all-time highs.

Something has to give...

Check out the diamond top taking shape on the live cattle chart:

Diamond tops are a rare bearish reversal pattern. They’re so rare that I’m slow to draw their boundaries. 

But I was reassured when referencing Richard W. Schabacker’s Technical Analysis and Stock Market Profits: “The real bible of technical analysis.”

He points out,

It [diamond pattern] is rarely found in perfectly symmetrical and clearly defined form: a certain amount of latitude must be taken and is permissible in drawing its boundaries.

Schabacker’s the authority, so I’ll give myself some wiggle room.

I see a broadening price action...

From the desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.

We've also sprinkled in some of the largest ADRs from countries that did not make the market cap cut. 

These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.

It's got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.

The beauty of these scans is really in their simplicity.

We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness.

Let's dive in and take a look at some of the most important stocks from around the world.

Here's this week's list:

...

From the Desk of Ian Culley @IanCulley

Cattle futures are defying gravity.

Unlike most commodities during this cycle (pick your favorite base metal or grain contract), cattle have yet to correct lower. 

Instead, they’re still hanging around new all-time highs.

Something has to give…