A question that keeps coming up to me is why Consumer Staples and Low Volatility stocks are outperforming.

These are normally the types of things you see when stocks in general are under pressure.

This is the kind of rotation you get in bear markets.

But the back half of 2022 was good for stocks. The 4th quarter was great.

Most stocks have been ripping for almost 7 months now. This is NOT the type of environment where Staples and Low Volatility stocks tend to outperform.

And while they might be making new multi-year highs relative to the S&P500, it's pretty easy to outperform an index with so much exposure to growth stocks. So can we even call that 'outperformance'?

This week we're looking into the Infrastructure sector.

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 The Hall of Famers, The 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 regular basis.

Welcome to the Short Report.

From the Desk of Kimmy Sokoloff

The market gapped up nicely and held strong today.

We've got CPI in the morning, so be on your toes.

This is the video recording of our January 11, 2023, Inside Scoop Weekly Strategy Session.

The only Form 4 on today’s list was filed by the chairman and CEO of Erasca $ERAS, who revealed a purchase of $231,420.

Aequim Alternative Investments filed a 13G reporting a passive ownership stake of just over 5% in the oil & gas explorer, Chesapeake Energy $CHK.

From the Desk of Kimmy Sokoloff

Yesterday we saw a lot of whipsaw.

And then we had a slow grind higher to finish the day above the 50-day moving average on $SPY at 389.92.

Historically, Industrial stocks are the ones with the highest positive correlation with the overall market, among all the S&P sectors.

Financials are obviously important. We don't have bull markets around here without them.

Technology has also been important, considering it has the highest weighting among all the sectors in the U.S.

But when you run the numbers, it's actually Industrials that comes out on top.

Industrials are officially the market's most important sector.

And so when we take a look at how they're behaving, I'm still not seeing the weakness that most investors keep telling me is coming.

In fact, look at Industrials breaking out to new multi-year highs relative to the rest of the market:

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

It's a new year, but the same leadership groups continue to outperform.

As Charlie Dow taught us long ago, trends persist, so this is no real surprise.

All we can do about it is keep leaning on these outperforming groups.

We have a handful of stocks that fit this bill today. Let's get right into it.

From the Desk of Kimmy Sokoloff

Lots of volatility today.

We dipped down to $SPY's 21-day moving average at 386 and bounced, which was nice.

First Santa Claus showed up for his rally.

Now the "First 5 Days" of the year were up (+1.37%).

That's 2 for 2 so far in the January Trifecta.

So now what's next?

The January Barometer is the last leg of the early year triple crown.

"As January goes, so goes the rest of the year". According to my handy Stock Trader's Almanac, the S&P500 has an 83.3% hit rate for the full year when January is in the green.

So with more and more positive signs for stocks, it really shouldn't be a surprise to anyone.

The trend for most stocks has been up and to the right. That was a strong back half of 2022 and a very strong 4th quarter.

And not just in the U.S., but we're seeing breadth expansion internationally.

The weaker Dollar has certainly helped.

The biggest Form 4 filing on today’s hot list is from Artal Group S.A., which revealed the purchase of 48,774 shares in small-cap biotech company Scholar Rock Holding Corporation $SRRK.

That’s equivalent to $455,090.