A nearly 3-year-long bearish-to-bullish reversal pattern has whetted my appetite for today's trade.

And a follow-through could deliver a nice dash for cash.

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

1. No new positions today.
2. Rolled XLI to January options.
3. Closed XRT at profit target.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

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.

Nowadays, to make the cut for our Minor Leaguers list, 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...

The biggest insider move today comes from Paul J. Fribourg, a director at Estee Lauder Companies $EL, who purchased $10,045,534 worth of shares, as reported in a Form 4 filing.

The stock has dropped 82% from its all-time highs and is now trading at its lowest level in a decade.

This significant insider buy signals confidence in the company's potential recovery.

Here’s The Hot Corner, with data from November 15, 2024:

In another Form 4, director Alfred W. Zollar revealed a purchase of $203,970 in Nasdaq Inc $NDAQ.

We continue to witness insider activity in solar stocks. Today, we have data from the president and CEO of Enphase Energy $ENPH, who made a purchase of 5,000 shares.

Enphase has fallen 30% in the last two weeks, as solar stocks have collapsed following the election.

With the stock trading at its lowest level in more than four years...

Today's number is... 16

On Friday, we saw the S&P 500 closed down 1.3%. This marks the 16th time this year that the index has declined by 1% or more in a single day.

Here's the data:

(right-click and open image in new tab to zoom in)

Let's break down what it shows:

The first column represents the year, while each subsequent column indicates the number of large down days for that year, ranging by declines of 1%, 2%, and 3% or more and total count.

The Takeaway: Although experiencing 16 declines of 1% or more might seem significant, it is actually below the historical average. Since 1950, the average year typically experiences about 25 such declines. During 2024, most of the 16 days with a 1% or more market decline occurred amid a short-term market pullback.

On average, each year tends to have 3 to 4 pullbacks of 5% or more, and in 2024, we have only seen two pullbacks of this size.

Therefore, a similar-sized pullback at this point would be completely normal and wouldn’t be surprising at all.  ...

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.

Yesterday I talked about some areas that are struggling to hold onto their post-election gains. The list has grown following today's selloff.

One group that’s been unfazed by this week’s volatility is financials.

Today, let’s flip the script and focus on an industry showing serious resilience.

Banks have been one of the best-performing groups over the past week, positioning themselves as leaders in the current environment.

The S&P Banks ETF $KBE is on the verge of completing a textbook reversal pattern relative to the S&P 500.

The ratio is piercing through the upper ends of this base as we speak.

The 200-day moving average has been flat all year but is curling up, suggesting that the trend could be at the early stages of reversing.

In technical analysis kindergarten, you'll learn there are 3 asset classes: stocks, bonds, AND commodities.

Without all 3, you're missing a piece of the puzzle and are putting yourself at a disadvantage.

Since commodities peaked in absolute and relative terms in 2022, they have dramatically underperformed stocks.

It's gotten to the extent where there's not any momentum to the downside remaining.

Commodities have carved out a massive bullish momentum divergence relative to stocks since the start of 2024:

As you can see, DBC/SPY has made lower highs and lower lows all year while the 14-day RSI (momentum) has made higher highs and higher lows.

In addition, the ratio is at the same level it was when it bottomed in the prior cycle and began a multi-year uptrend. 

It's now or never. If the commodity bulls are going to reverse this downtrend versus stocks, they need to show up now.

The Invesco Commodity Index $DBC has carved out a textbook basing pattern:

The Invesco Commodity Index is composed of over 55% energy, 10%...

A weaker dollar will drive Bitcoin, gold and silver higher.

The Greenback often dips toward year-end. It’s the usual seasonal pattern.

And this price behavior is even more pronounced in election years. 

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...

Our last trade idea post was titled "European Vacation." Today's trade is in a name that is most definitely in the vacation theme.

And if you've attempted to book a hotel room in the past year, you know that rates are soaring. This might be bad for budget-sensitive travelers, but it can be bullish for investors.

So let's hedge our travel expenses.

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

1. No new positions today.
2. Rolled TLT to January options.
3. Closed IWM at profit target.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

We get a lot of questions about how to buy memecoins. So we made a video for members of ASC Crypto to answer them.

The biggest insider move on today's list comes from a Form 4 filing by Charlie Ergen, co-founder and chairman of EchoStar Corporation $SATS.

Ergen made a power move, buying 1,551,355 SATS shares, for a value of $43.5 million.

This purchase not only is a vote of confidence—it’s the kind of buy an insider makes for only one reason. They believe the stock price will rise considerably from here. 

Here’s The Hot Corner, with data from November 14, 2024:

Divisadero Street Capital Management filed a 13G for Rush Street Interactive $RSI, revealing an increase in their stake from 5.78% to 7.80%.

The CEO of Lyft Inc $LYFT revealed a purchase of $250,271 in its latest Form 4.

Manuel Anja, a director at Hims & Hers Health $HIMS bought 5,000 shares.

The stock looks poised to break out of a massive base:

A week after the election, stocks are now digesting some of their impressive gains. 

Some groups like banks, software, Ark funds, and even energy are holding up the best, while others struggle to hold onto those gains and are now giving it all back.

The SPDR S&P Metals & Mining ETF $XME is a great example of this second group that is losing steam.

XME tried to break out from a multi-year base the morning after the election, but was immediately rejected, and has since fallen back into its old...

If you’ve been following along, you already know. We want our offense on the field. We’re going long.

For baseball folks, we’re putting the pinch hitter in. We’re looking to go yard.

Welcome to the growth chronicles.

Over the coming weeks, I’ll be doing a series of posts on the most risk-on areas of the market.

The list of industry groups that are in uptrends continues to grow, fueled in large part by the speculative growth theme.

I’m going to cover the ones I’m most interested in and talk about the specific stocks I’m buying.

This week, it’s all about space and exploration.

While the market awaits the much-anticipated SpaceX IPO, I think many investors will be surprised at just how many options we already have to play this theme.

There is even an index for it. Here’s the ARK Space Exploration & Innovation ETF:

Here's the replay and chartbook from today's livestream. Note that we talk strategy every Thursday at 11 a.m. ET, and I answer questions in the chat room.

Be sure to join us and maximize your return potential.

This morning, we had the legendary turtle trader, Jerry Parker on the Morning Show. Watch the replay here.

He emphasized the importance of outliers in a system. The core idea is simple: let winners run and keep losers tight.

Outliers are the difference-maker in any sound trend following strategy.

At one point, Jerry likened his trading approach to “being a home run hitter.”

It’s the same thing we’re doing here with Breakout Multiplier. We’re shooting for outsized gains. When managed correctly, they take care of all the losers.

We really nailed a perfect entry last week with Square, and I think it’s setting up to be our next big hit.

Last Friday, we bought this...