It has paid to pick our spots wisely in the commodities complex as it's been a very bifurcated asset class this cycle.

Live and Feeder Cattle are carving out distribution patterns.

Energy has been a rangebound mess.

Meanwhile, the relative strength has been in the soft commodities and precious metals.

Gold recently put the finishing touches on a multi-decade accumulation pattern.

Cocoa has resolved a 12-year base and rallied over 400% to new all-time highs.

Coffee is flirting with new multi-decade highs after completing a tactical reversal pattern.

And we're betting that Cotton will participate to the upside with the rest of the soft complex soon. The soft and fluffy commodity is on the verge of trapping the bears below a key level of polarity.

We want to continue leaning into the relative strength in soft commodities.

Back on a July 15th episode of The Flow Show, Strazza and I put on a trade in Viking Therapeutics $VKNG. You can get all the trade details here.

We still like the setup, but with September options, our original position is running out of time.

And recently, the Analysts published a report that makes me think I should roll my position further out in time:

It's been over a month since we launched Breakout Multiplier, and oh boy have we been having fun!

We've navigated through some challenging market conditions, but it hasn’t stopped us from finding plenty of solid opportunities on the long side.

We've managed to secure several significant wins already. 

In this post we’ll review some of those winners and discuss how we’re handling our open positions.

We’ll do this at least once a week going forward.

Here’s our position tracker, updated as of this afternoon (click to enlarge):

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

1. No new positions today.
2. Rolled XLB position to October.
3. No exits since the last report.
4. Current status of open campaigns.

Let’s dig in!

From the Desk of Steve Strazza @Sstrazza

The best short squeezes always start with a burst of momentum.

These moves are often sparked by a headline or news-related catalyst.

The price action in Peloton $PTON yesterday was an excellent example of this dynamic.

After reporting earnings Thursday, Peloton screamed higher and registered its best single-day performance in history.

While the report was nothing extra special, it was the first time the exercise bike maker beat on both the top and bottom line since May 2021.

When sentiment is this sour, sometimes "less bad" is all it takes.

PTON rallied 35% on the heels of the report, and with such a massive short interest, we think it's just getting started.

Here's the chart with the 1-day rate of change in the lower pane:

With extreme short-term momentum behind this stock, we think the squeeze is on.

Let's talk about how we're playing it.

Here's another look at the $1.7B fitness technology company:

...

The Equally-weighted S&P500 is on pace to close the week at a new all-time high.

Based on the early trading in U.S. Markets, and the strength we're seeing in equities around the world, this looks like it's going to happen by the end of today.

Think about it like this: Mathematically it cannot be only 7 stocks going up if the Equally-weighted S&P500 is making new all-time highs.

It's just math.

And this really just speaks to the broadening participation across the market.

Just last month we saw the most amount of stocks hitting new 52-week highs that we've seen in years - on both the Nasdaq AND on the NYSE.

We also so the most amount of stocks on the NYSE that were above their 200 day moving average than at any point this entire bull market.

You cannot tell me that things are getting worse, if mathematically things just keep getting better.

And I preface with all this because when you zoom out, these mega-cap leaders are still drivers of this market.

They're just not the only ones.

But Nvidia is an absolute beast. This thing is now valued at $3 Trillion.

This is the perfect sort of market to look for relative strength.

When the tape is sideways and choppy, you want to see the first ones showing their heads above resistance levels and breaking higher. While it's not necessarily a great idea to buy those breakouts given their high likelihood to fail with everything else moving sideways, it is wise to simply note them down.

In the case of this week, MATIC stands out.

It climbed up two spots on our power rankings and the long-term setup is so well defined.

I think there's a good opportunity there.

Here's this week's crypto roundup. It's an opportunity for us to take a step back, set aside the distractions, and delve into the key charts shaping the crypto complex.

The most significant insider buy on today’s list comes via a Form 4 filing by Jerry Jones, owner of the Dallas Cowboys.

Jones purchased an additional $34 million in Comstock Resources $CRK.

Baker Bros Advisors LP filed a 13D for Kymera Therapeutics $KYMR reporting an increase in its ownership stake from 9.28% to 9.30%.

Here’s The Hot Corner, with data from August 22, 2024:

From the desk of Steve Strazza @sstrazza

For the first time in my career, I'm buying bonds.

It has less to do with positioning defensively and more to do with making a call on lower interest rates.

But what it really comes down to, more than anything, is the chart pattern.

Bond funds are completing bearish-to-bullish reversals for the first time in years. 

This is the same exact pattern we've gone back to time and again this cycle... and every cycle, really.

Rounding bottoms are some of the most reliable patterns we have as technicians.

And we're seeing them across the board in bond funds right now.

Let's dive in and talk about some of them.

Here's the US Aggregate Bond ETF $AGG: 

This fund holds treasury securities, corporate bonds, mortgage-backed securities, and municipal bonds. It is exactly what it sounds like. A diversified bond fund. It also offers investors a 3.4% yield.

The US Aggregate Bond ETF is pressing against the upper bounds of a multi-year accumulation pattern. With...

From the Desk of Steve Strazza @Sstrazza

We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.

However, when it comes to this one, it couldn't be any simpler!

With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.

Welcome to The Junior Hall of Famers.

This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.

The bottom line is it is a bull market. We want as many vehicles and options to express...

I briefly walked through how I want to be patient trading names in the short-term while focusing on relative strength.

While today's name isn't currently actionable, it is just a stone's throw from being so. And, it's both a relative leader as well as having the tailwind of smart money in behind it.

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

1. No new positions today.
2. Adjustment to XLK position.
3. Exited XME position.
4. Current status of open campaigns.

Let’s dig in!

Here's the replay and chart deck from today's stream. 

As a reminder, we do these videos live every Thursday at 11:00 am ET and I'm answering questions from the chat. 

If you're like me and you have a bullish long-term bias towards Bitcoin and other Crypto assets, then you're constantly looking for opportunities to get exposure.

But with equities in the middle of a bull market, we also don't want to be in something that isn't moving.

This is the time to make money. So we want to make sure we're in the things that can make us money NOW, not "one day hopefully in the future..."

Take a look at the price of Bitcoin still working on completing this multi-year base.

The most significant insider buy on today's list comes via a Form 4 filing by Abdiel Capital LP. 

The investment firm revealed a purchase of roughly $2 million in Appian Corporation $APPN.

Director John Bilbrey bought $376,161 worth in Olaplex Holdings $OLPX.

Here’s The Hot Corner, with data from August 21, 2024:

In another Form 4, the president and CEO of Kratos Defense & Security Solutions Inc $KTOS reported an acquisition of 11,980 KTOS shares.

Over in Washington, Rep. Scott Franklin of Florida filed a Periodic Transaction Report declaring purchases in the following stocks:

• Accenture plc $ACN;
• Air Products and Chemicals Inc $APD;
• Amgen Inc $AMGN;
• General Dynamics Corporation $GD;
• Johnson & Johnson $JNJ; and
• Starbucks Corporation $SBUX.

Earlier this...

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

We...

The question we're asking ourselves today is a big one.

Is the US Dollar breaking down from a multi-year consolidation?

With the dollar rangebound all year, we haven’t experienced a trending currency market. 

When the dollar is trending higher or lower, we have a good idea of the impact it is likely to have on other markets.

However, when it is trendless, the dollar is neither a headwind nor a tailwind for risk assets.

We think that could be changing.

Here's a weekly line chart showing the U.S. Dollar Index making new year-to-date lows:

As you can see, the US dollar bears have taken control and resolved this multi-year consolidation to the downside.

Here's another way to look at it.

The index is trading at the lower bounds of a well-tested range. Notice the flat 200-day moving average, illustrating the sideways nature of the primary trend.

And notice momentum, hitting its lowest level...