From the Desk of Steve Strazza @Sstrazza

First up is the $1.3B pet health & wellness services provider, Petco $WOOF:

We first covered Petco in June, after the retailer had its best 3-day rally in history.

With a 200% run-up in the month of May, the stock earned a few months of digestion, and that is exactly what's played out.

Last week, it rallied over 50% on the heels of earnings, sparking a new short squeeze.

With a 29% short...

I'll be Streaming LIVE TODAY at 4 p.m. ET to talk about what that 20% correction in Semiconductors means for this market, where that money is going next, why markets are usually volatile ahead of November’s election, and what exactly we’re doing to profit from it all.

Click here to join us FREE.

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There are plenty of Technology stocks that are working.

You just have to look.

Our...

That was it?

We can just take our ball and go home now?

The A.I. story has come and gone and the recession that they've been telling us about all these years is finally here?

So this is a major top in Nvidia - ending the whole damn thing?

That's your bet?

And this massive top in Microsoft is exactly that - a historic top? One for the record books?

So the largest company on the planet is about to complete this 8 months of institutional distribution and is about to bring down the entire Technology sector?

Keep in mind that Nvidia and Microsoft combine for over 41% of the S&P Technology Index. (Apple is only 5% of Tech now)

Here's what I'm being told is the end for Microsoft...

Is that the bet you're making?

This is the end of the bull market?

Because I see Consumer Discretionary as the leading sector over the past month. Look at those returns, all outperforming the major averages by a long shot:

And another thing.

You know how we've been pointing out that High Beta has severely underperformed Low Volatility?

Well look at this monster whipsaw.

Keep in mind that...

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

In this scan, we look to identify 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 to becoming the market behemoths they are today.

When you look at the stocks in our table, you'll notice we're only focused on Technology and Growth industry groups such as Software, Semiconductors, Online...

From the Desk of Steve Strazza @Sstrazza

Last week, we outlined a short squeeze in Phathom Pharmaceuticals $PHAT, which has been working for us.

It doesn't seem like the market is finished squeezing the short sellers out of their biotechnology positions.

Today, we're discussing yet another biotech stock that has a ridiculously high days-to-cover ratio and short interest.

More importantly, the risk couldn't be more well-defined.

So, we're stepping up to the plate and taking another swing at a short squeeze.

After Covid there was no sector that did better than Consumer Discretionary stocks.

Locking everyone down and sending them all a check to go spend, as it turns out, was great for the Consumer Discretionary sector. 

And then 2021 ended and the correction in Consumer began...

Years in the making, here is the massive top in Consumer Discretionary relative to the S&P500 that's got people talking...

Or is it that the Consumer stocks are just finding support once again where they did a decade ago?

Is the squeeze now ready to get going?

It's interesting that Chip Stocks find themselves in a very similar position.

See:...

Did you hear about the massive top in Semiconductors?

Everyone is talking about it on the internets. So it must be true. 

Seems the easy call here to make is to say "that was it". The Semiconductor story and the bull market as we know it is over...'

One of the things they teach you in the first week of Technical Analysis kindergarten is that infamous Head & Shoulders top.

The reason this is so popular is because it is "easy" to recognize. You have a left "shoulder", followed by a higher high (head), and completed with a lower high, forming the "right shoulder".

Once the "neckline", represented by these gray shaded lines above, gets broken, the whole house of cards collapses.

Or so we're taught.

But here's the thing. 

Asset prices trend. Massive topping formations are much more rare. 

In most cases, particularly during bull markets, these sorts of formations tend to resolve higher, and these "massive tops" are just figments of traders' imaginations.

This could very well be a historic top and selling opportunity in Semiconductors.

It could.

And that's the beauty of Technical...

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 highs in order to focus...

High Beta outperforming Low Volatility stocks is usually something we see in healthy market environments.

This year, however, High Beta has been struggling to make any progress vs their Low Volatility counterparts.

"Beta" is essentially how volatile a stock is relative to its benchmark.

So High Beta think $SMCI, $NVDA, $AMD, $AVGO and others. You have half the S&P500 High Beta Index in Technology and another 17% in Consumer Discretionary.

In contrast, for Low Volatility think Berkshire Hathaway, Coca-Cola, Visa, Procter & Gamble. You'll find a lot of Financials, Consumer Staples, Utilities and Industrials in this group.

Here is the ratio of High Beta vs Low Volatility breaking down to the lowest levels all year.

This breakdown in High Beta / Low Vol comes in an environment where we have yet to see any real meaningful expansion in stocks hitting new lows.

You can't have a bear market or a correction of any kind without the prices of stocks falling. And we haven't seen that yet.

Check the new 1-month lows, new 3-month lows, new 6-month lows. You'll see.

And don't even bother with new 52-week lows, because they're...

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.

With fall approaching us, things are beginning to change.

The weather is perfect for golfing, the Kansas City Chiefs are back to dominating the NFL, and it's the best time of the year for Natural Gas futures.

In July, we outlined asymmetric risk/reward setups in Natural Gas futures and 4 natural gas stocks.

As we expected, it has taken some time for these setups to come to fruition. 

However, the cleanest fossil fuel has carved out a textbook reversal pattern and looks poised to blast off any day now.

Here's the average monthly performance for Natural Gas futures over the past 3 decades:

Natural Gas has a tendency to rally in the fall as September and October are the two best months of the year.

The longer-term structure is also shaping up quite nicely:

Historically, we've seen demand for methane step in at this level time and again.

But these bottoms have been messy...

So instead of getting chopped up in a range, we like the monthly MACD as a mechanism for timing our entry.

This long-term...

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 us with only the strongest stocks. Let’s talk about some of...