When we talk about market bellwethers, we are referring to large-cap equities that indicate the broader market's future direction.
These stocks often have a heavy weighting in the most important sectors and indexes, as well as a notable economic impact due to their size and influence.
The world's largest bank and financial institution, JPMorgan Chase $JPM checks all these boxes and more.
For that reason, we treat JPM as an index itself. Basically, as JPMorgan goes, the market goes.
From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts
Breadth is expanding to a growing list of sectors and industry groups as the current bull market continues to broaden in scope and participation.
Naturally, this phenomenon is not limited to the US. We’re also seeing more and more countries and regions around the world join in on the party.
As the dominance from mega-cap growth fades, and cyclical and value stocks assume leadership roles, the stage is finally set for international outperformance.
In fact, despite how good US stocks were in 2023, they were not the best.
Today, we’re going to talk about Latin America. They were last year’s global leader, and we think the region is poised for more outperformance in the future.
First, with all the buzz about US stocks this past year, you’d think they were the leader. They weren’t.
Here is a 2023 performance chart of international indexes by region:
Non-members can get a quick recap of the call simply by reading this post each month.
By focusing on long-term, monthly charts, the idea is to take a step back and put things into the context of their structural trends. This is easily one of our most valuable exercises as it forces us to put aside the day-to-day noise and simply examine markets from a “big-picture” point of view.
With that as our backdrop, let’s dive right in and discuss three of the most important charts and/or themes from this month’s call.
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.
Welcome back to Under the Hood, where we'll cover all the action for the week ended January 5, 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.
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.
