From the Desk of  Ian Culley @Ianculley

The market environment has been shifting in favor of the bulls all summer.

Breadth thrusts are firing as participation beneath the surface expands. Risk assets – commodities and stocks alike – are reclaiming critical levels of former support.

And our bull market rebirth checklist is triggering four out of five criteria.

This is a huge departure from earlier in the year.

But one aspect of the environment remains the same – interest rates. Yes, rates have come off their June peak. And, yes, US yields have paused at a logical level marked by a series of former highs.

That’s all true, and it all makes perfect sense.

But we still find ourselves in a rising-rate market as the underlying uptrend remains intact – for now.

Earlier in the month, we broke down the ranges in the 30-, 10-, and 5-year US yields. Today, we'll turn our attention overseas.

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This is the video recording of the August 18, 2022, Weekly Town Hall w/ Willie Delwiche.

08/18/22 2:00 PM ET

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

The next new trade in our Paid-to-Play portfolio is:

One of the big characteristics that often separates great traders from mediocre ones is the willingness and ability to sit on the sidelines when it's necessary.

A brief adage we often mention is the distinction between seeing a setup and looking for one. Be patient, prepare your perfect swing, and the setups will come to you.

We never actually know that we've been in a bull market until well after the bottom.

It's easy to look back and pinpoint the March 2020 low or the March 2009 low, for example, and say, "That's when the bear market ended and a new bull market started".

But in real time, when we're going through that transition, how can we possibly know?

Well, classic signs of the end of the bear markets are things like historically bearish sentiment extremes and washout breadth levels.

We obviously had both of those as our sentiment readings this summer were the most pessimistic since the Great Financial Crisis, and only 14% of stocks on the NYSE were in uptrends (compared to almost 90% entering 2021).

Those are the things you see just before the market turns.

Now, what are the things you see just ...

The largest insider buy on today’s list is a Form 4 filing by Bill Gates.

Gates revealed an additional purchase worth $25 million in Ecolab $ECL, as he continues to add to his position.

From the desk of Willie Delwiche.

I’ve got an old pair of Chaco sandals that I’m not ready to part with just yet. But the soles were becoming detached from the footbed, so I had to do a little repair work. 

I glued them up and started thinking about rigging a clamp to provide even pressure to help the glue set. Catching sight of a couple of bricks laying nearby, I realized that these would work just fine for this type of job.

Would a well placed clamp or two have produced a more textbook repair? Perhaps. But the bricks I had at hand worked just fine for this.

From the Desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey...

We had a resting GTC order filled at our profit target in the Paid-to-Play portfolio today:

From the desk of Willie Delwiche.

Key Takeaway: Permabulls will almost always complain about rallies being unloved, just as permabears never leave their refrain that downside risks are under appreciated. That is the prism through which they view the world. In the current situation, complacency is rising and optimism is building, both from low levels. After the buying panic seen in the NAAIM data in July, we saw something similar in this week’s data from Consensus Inc (the largest one-week increase in optimism in over a decade). Even though bears still outnumber bulls on the AAII survey, equity ETF inflows are heating up. The shift from excessive pessimism to increased optimism is the most bullish part of the sentiment curve and that is where we find ourselves. Breadth thrusts and surging momentum are cherries on the top.

Sentiment Report Chart of the Week: Strong Momentum Doesn’t Usually Just Evaporate

This study looks at instances of 40-day momentum surging from below zero to above 15%. There are...

Monday night we held our August Monthly Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!