From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Welcome to TheJunior International Hall of Famers.
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-listed international stocks, or ADRs.
This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.
Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
Let’s dive right in and check out what these future big boys are up to.
This is our Junior International Hall of Famers list:
I’ve parroted my bond outlook during internal meetings and across our Slack channels in recent weeks, partly in jest but mostly to highlight the underlying uptrend in rates.
Honestly, I’m not crazy about selling the short end of the curve, though I believe there’s a trade there.
Instead, there are far better opportunities with longer-duration bonds.
Shorting bonds isn’t the most popular play with the Fed and the dollar and the CPI…
But that makes me like this trade even more, especially when I put the headlines and the dominant narrative aside and simply focus on the charts…
I’m traveling throughout Southeast Asia — to eight different countries — with my All Star Charts analyst Steve Strazza, giving presentations at local Chartered Market Technicians (CMT) Association events, meeting local traders, enjoying native cuisines, and just marveling about the similarities we traders from different corners of the world all share.
So for the rest of the month of July, I’m going to cut the preamble and get right to the action for you guys.
As such, here’s the setup for the trade I’ll be putting on today:
Dividend Aristocrats are easily some of the most desirable investments on Wall Street.
These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.
As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world.
Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.
Here at All Star Charts, we like to stay ahead of the curve. That's why we're turning our attention to the future aristocrats.
In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we're curating a list of stocks that have raised their payouts every year for five to nine years.
We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money."
Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.
While many investors have been focused on arbitrary lagging indicators like the economy, we rather keep our attention on reality.
We're grown adults. We don't need bedtime stories to go to sleep at night. So fairytales about recessions, or inflations, or bidens are just not anything we're interested in.
We get paid to sell things at higher prices than where we buy them.
That bet has paid off handsomely for us and anyone listening.
So as investors we all have a choice. Do we bet that the correlation is all of a sudden going to change tomorrow? Or do we bet that things just remain the same?
Here is the US Dollar Index consolidating in what appears to be a classic continuation pattern, within an ongoing downtrend:
Welcome back to Under The Hood, where we'll cover all the action for the week ended July 7, 2023. We publish this report on a bi-weekly basis, rotating it with The Minor Leaguers.
What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names.
There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.
From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts
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.