From the desk of Steve Strazza @sstrazza

This is one of our favorite bottom-up scans: Follow the Flow. In this note, we simply create a universe of stocks that experienced the most unusual options activity — either bullish or bearish… but NOT both.

We utilize options experts, both internally and through our partnership with The TradeXchange. Then, we dig through the level 2 details and do all the work upfront for our clients. Our goal is to isolate only those options market splashes that represent levered and high-conviction, directional bets.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

From the desk of Steve Strazza @Sstrazza

Welcome to our latest “Minor Leaguers” report.

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.

We recently decided to expand our universe to include some mid-caps…

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.

The way we did this is simple…

It's much better living for stock market bulls if we're above those October lows.

Otherwise, I think you're just living on a prayer.

And why the October lows?

That's the last line of defense for the world's most important Indexes.

It's Saturday Morning Chartoons time. 

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.

You can find the whole list of trades here.

Below you'll find the full PDF of this week's charts:

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Tuesday February 1st @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Tuesday evening:

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

If you’re searching for strength, look no further than commodities!

With risk assets coming under increasing pressure, the strength from commodities and commodity-related stocks stands out that much more. Except for rates, it’s the only thing the bulls have left.

When we look beneath the surface, so far, the story centers around energy – whether we’re talking about crude oil printing fresh seven-year highs or Chevron Corp. $CVX breaking out of a multi-year base to new all-time highs.

Energy is -- and has been --  re-asserting itself as the next dominant leadership group. 

But unlike the stock market -- where energy is the only group working -- we’re seeing broad participation within the commodities market.

In fact, there are still plenty of pockets of strength we want to be buying.

Today, we’re going to highlight one of those areas by outlining a trade setup in soybean oil.

Let’s dive in!

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 which you can check out here.

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:

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley  

The Federal Reserve is doing its best to prepare the market for what is expected to be a year of rate hikes. But investors aren’t exactly enthusiastic about this outlook, as stocks came under further pressure following Wednesday’s Federal Open Market Committee announcement.

The bond market is also offering some valuable information again. And considering the recent volatility, it’s more important than ever to listen closely.

When we think about bonds, credit spreads are always top of mind, as they’re a great barometer of market health. When there's stress on risk assets, it shows up in credit spreads. 

When analyzing credit spreads, all we’re doing is measuring the difference in yield between a Treasury (the safest bet) and a corporate bond (riskier asset) of the same maturity. If these spreads begin to widen, it’s usually problematic for equities.

Editor's Note: Before we dive into the substance of today's note, I want to be sure you're all aware that our Crypto Friday Live Strategy Session will get started tomorrow, January 28, at 3:00 p.m. ET.

See you tomorrow at 3:00 p.m. ET.

Relative strength.

We talk about it all the time -- and for good reason. If these last few years have reinforced anything, it's the power and efficacy of incorporating relative strength into our approach.

You can never outperform if you don't hold assets that are doing exactly that, outperforming.

Given that trends are more likely to continue than reverse, if a group of assets have outperformed their alternatives, it's more likely than not they'll continue to do so.

One of the primary components of our work as technical analysts here at All Star Charts is finding favorable opportunities through relative strength: stocks, commodities, sectors, and, more recently, in cryptocurrencies.

Buying stocks below overhead supply has always been a bad idea for me.

I don't know about you, but it's usually been nothing but frustration in my experiences.

You see, that's when stocks go down in price. When they're being overwhelmed by selling pressure.

So as I've grown older I've gotten much better at avoiding situations where I own things below resistance.

Trust me, you go through it enough and you eventually stop.

The bottom line is this: If the Nasdaq100 is below 350, there's nothing to talk about from the long side.

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.

One of the most underappreciated elements about Bitcoin is the transparency of transactions. This enables us to gain deep insights into the behavior of investors and users of the network.

The growing industry of on-chain analysis looks to address the concerns of those who wish to categorize, cluster, and ultimately analyze entity behavior to find increasingly reliable and actionable signals.

Blockchain mechanisms mean analysts and traders have access to a wide array of data that isn't possible to replicate in traditional asset classes, like stocks, commodities, and bonds.

One of the key metrics we've found to be of tremendous value is quantifying investor supply and demand through the use of supply shock.

In today's note, we'll outline how we use this data to supplement our traditional price work and technical analysis.