Back in the late 1800s, Charlie Dow was a journalist in Springfield Massachusetts.
His job was to write about the stock market. But when he would go knocking on doors asking companies questions, they would tell him, "Our business is none of your business".
So how could poor Charlie do his job then?
Well, he concluded that there was a better way to do this.
He recognized that there were a select group of stocks that, "Made the goods", and he called those the Industrials.
And then there was the group of companies that, "Delivered those goods". At the time, they were the Railroads.
If one of these groups of stocks were going up in price, and so was the other group, then things are moving in a positive direction together. Those were good signs for the market.
It was specifically when one of those groups were rising, but the other one wasn't, that something was likely wrong.
Welcome back to Under the Hood, where we'll cover all the action for the week ended February 16, 2024. This report is published bi-weekly, in rotation 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.
The new all-time highs in the S&P500 and Nasdaq100 earlier this month have been well documented.
What they don't tell you is that the equally-weighted versions of those market-cap weighted indexes are just now getting back to their late 2021 highs.
They never even broke out. In fact, they're finally just getting back to where they started.
Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.
We've also sprinkled in some of the largest ADRs from countries that did not make the market cap cut.
These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.
It's got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.
The beauty of these scans is really in their simplicity.
We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.
Based on the market environment, we can also flip the scan on its head and filter for weakness.
Let's dive in and take a look at some of the most important stocks from around the world.
We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.
However, when it comes to our latest project, it couldn't be any simpler!
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 stocks.
Welcome to The Junior Hall of Famers.
This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.
There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.
One of the things we've been monitoring closely over the past month is the new lows list.
I see very often how people love to just subtract random numbers from each other, mostly for the sake of subtracting.
There's really no reason for it.
For example, lately I'm sure you've noticed some traders and analysts taking the new 52-week high list and then arbitrarily subtracting the number of new 52-week lows from it.
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.
