From the desk of Steve Strazza @Sstrazza

We've covered the Growth vs Value relationship ad nauseam since late last year.

We continue to believe that a structural trend reversal in favor of Value is underway.

We laid out our thesis and the key level we're watching to potentially prove it wrong... That is and has been 1.70 in the Russell Large Cap Growth vs Value ratio.

Once again this month, I’m going to share info on positions that were closed or managed in the month of April. As a reminder, our exit plans are always laid out ahead of time in each trade idea we publish. In every case, the exits mentioned below were all exited in accordance with the plan as laid out.

As we head towards May expiration, we only have one position remaining with May options.

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying 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.

The ASC team has been writing a lot recently about how markets are looking a bit "messy" right now. This isn't a bullish or bearish declaration, it's just an indication that many of the recent moves we've seen are likely to hit into some consolidation.

And as an options traders, the word "consolidation" should trigger thoughts of delta neutral credit spreads.

With this in mind, I've identified a good short strangle candidate.

From the desk of Willie Delwiche.

On this week's episode of Bearish or Bullish, we talk about Year 2 of Bull Market cycles for stocks. Is this one those? Like 1976, like 1983, like 2004, like 2010?

What about Ethereum continuing to hold its breakout? Why is Ether doing so much better than Bitcoin?

Financials and European stocks breaking out of historic bases?

European Super Leagues? The Knicks don't suck?....what the heck is going on around here?

Let's discuss:

The messy market for stocks continues. Sure, a few stock indexes in the United States have made new highs, but how many stocks in those indexes are doing that?

Not as many, that's for sure, especially in small-caps and the Nasdaq, where we're only seeing a fraction of stocks still making new highs.

Divergences persist....

This environment continues to remind me of a lot of the "Year 2" of market cycles that we've seen before. Take the initial thrust off the 2009 lows for example. Notice the sideways chop in Year 2 of that cycle:

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

A growing number of domestic and international markets are running into key levels of interest. 

This is a theme we’ve discussed at length over the past six weeks. We've also discussed how we see similar developments in the Commodities and Fixed Income markets.

With this as our backdrop, are you surprised that we're also seeing similar action in the Forex markets right now? 

We aren’t! 

In this post, we'll highlight two traditional risk-on currency pairs, both of which are trading at critical inflection points. 

Let's dive right in.

First up is the AUD/JPY cross. This FX cross is the classic risk-on/risk-off gauge within the currency markets -- and since last November, it has been sending a clear message of “risk-on!”

From the desk of Steve Strazza @sstrazza

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.

The weight of the evidence still suggests it's prudent to be a buyer, not a seller, of risk assets for more meaningful time horizons.

Shorter-term, the market looks increasingly messy. For the first time in over a year, defensive assets are beginning to stabilize at logical levels of support, while stocks and major risk groups achieve our upside targets. Even a handful of some key Intermarket ratios are potentially diverging from the broader averages.

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

Check out our latest Mystery Chart!

What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.

This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.

It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!

The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize the price behavior objectively.

While you can try to guess the chart, the point is to make a decision…

So let us know what it is… Buy, Sell, or Do Nothing?

The relative strength this year has been in Ethereum. You can see the 2021 performance in this Koyfin chart below.

It's been the opposite of Gold. Ethereum actually goes up in price....

From the desk of Steve Strazza @Sstrazza

In our continued effort to identify individual equities that fit within our larger Macro thesis, we recently rolled out our latest bottoms-up scan: "The Minor Leaguers."

We write a post every other week where we outline some of our favorite setups from this universe of stocks.

We've already had some great trades come out of this column and couldn't be happier about the early feedback.

Moving forward, we'll be rotating this column with "Under The Hood" each week.

Ultimately, to make the cut for our Minor Leagues list, you must have a market cap between $1 and $2B. There are also price and liquidity filters.

Then, we simply sort the stocks by their percentage from new highs. Easy done.