From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing this is by identifying 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...

The move in metals, commodities, and materials was pretty rapid during the last couple of months. Given that, it's little surprise we've seen a pullback in a lot of these names over the past week or so.

One name that was recently on our Hall of Famers report rose rapidly with everyone else. And now it feels like it overshot a bit on it's pullback and it's offering a nice tactical opportunity to swoop in and steal some profits.

Anyone familiar with the endeavor of trading has eventually realized the flaws of our human instincts. This isn't isolated to investing.

It's a widely documented phenomenon that we're constantly susceptible to subconscious biases.

We're approaching this from the lens of technical analysis. But apophenia is universal to the human condition.

Apophenia: the tendency to perceive a connection or meaningful pattern between unrelated or random things (such as objects or ideas).

Let's run through some examples and see how it applies to trading.

Very high cash levels are a good thing.

Investors being scared to death is historically a net positive for stocks, not a negative.

According to BofA's Fund Manager Survey, we're near multi-decade highs for cash levels.

Take a look at those dates:

These are the registration details for our live mid-month conference call for Premium Members of All Star Charts.

Our next Live Call will be held on Monday March 21st at 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 Monday night:

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

For more than a year, most of the market and many of our risk ratios have been a trendless mess.

High Beta vs. Low Volatility, Copper vs. Gold, and our custom Risk-On vs. Risk-Off ratio have all gone nowhere since the beginning of 2021.

The Australian dollar/Japanese yen also falls into the range-bound category, as the risk-on pair looks a lot like the ratios we just mentioned.

But AUD/JPY has been showing resilience the past few weeks and is currently challenging the upper bounds of its multi-month range.

Since most risk appetite indicators aren’t giving us much in the form of new information these days, an upside resolution from AUD/JPY would be a major development. 

It hasn’t happened yet, but things are certainly setting up that way.

In today’s post, we’ll dive into one of our favorite risk-on/risk-off gauges – the AUD/JPY cross - and discuss what it’s currently suggesting about risk-seeking behavior.

Here's a dual-pane chart of the AUD/JPY pair and copper futures:  

...

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 $1B 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…

To make the cut for our new Minor Leaguers list, a company must have a market cap between $1B 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...

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.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they’re doing so for one reason only: because they think the stock is about to...

We've been overly obnoxious with our tone of mostly staying out of the Crypto market and playing defense.

There's been so little to discuss and so few actionable trades that our priority right now is waiting for reliable signals to suggest a resolution from this trading range.

Price action in most crypto assets is still range-bound. It appears 46,000 is the critical level for bulls to reclaim.

There are many mixed signals, so we have no read on current price action as of the writing of this report.

In today’s action, there was a large inside purchase reported by Sequoia Capital in the food delivery company DoorDash $DASH.

Sequoia has been a long-time investor in the stock.

In other insider purchases, Durable Capital Partners reported a buy worth roughly $5 million in Duolingo $DUOL.

And an Ambarella $AMBA director disclosed a purchase of just over $1 million in his company’s stock.

Warren Buffett’s Berkshire Hathaway $BRK.A also disclosed more buying in Occidental Petroleum $OXY.

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:

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

Commodities have been on a tear, with the Bloomberg Commodity Index recently posting its best week since 1970 and the CRB Index rallying more than 25% year to date.

Despite the broad strength from commodities, Dr. Copper – a key economic barometer – has yet to break out like so many of its peers. 

After making a new all-time high last Friday, buyers were unable to sustain the move, and price retreated into its former range.

While it’s great to see so many other contracts trending higher, bulls really need to see copper join the mix. If this is truly a new commodity supercycle, it better break out from this consolidation. 

It is that important to the overall asset class.

Let’s break down the various technical scenarios for copper’s recent move and discuss what they mean for the entire space.

First, the move could have been a premature breakout:

We also call...