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.

We also weed out hedging activity and ensure there are no offsetting trades that either neutralize or cap the risk on these unusual options trades.

What remains is a list of stocks that large financial institutions are putting big money behind.

And they’re doing so for one reason only: because they think...

From the Desk of Kimmy Sokoloff

No love for October yet, but be patient!

If $SPY really pushes past this 425.50 area, there's potential to 419.

From the Desk of Ian Culley @IanCulley

Precious metals no longer deserve the benefit of the doubt.

They no longer represent an opportunity cost, either.

No, gold and crew carry downside risk – nothing else!

What changed since last week? 

Gold futures undercut a critical level of interest…

Depending on who you ask, people might agree that consumers are feeling the pinch of inflation. The sentiment that I encounter on a nearly daily basis is: "I can't believe how much _____ costs now. It's insane!"

If we look at a daily chart of the consumer discretionary stocks ETF $XLY, we might draw a conclusion that consumers are beginning to feel tapped out, as the upward momentum in early 2023 seems to have run out of steam.

With elevated options premiums in $XLY, this sets up a nice options premium collection play.

From the Desk of Alfonso Depablos @Alfcharts

Coming into July, the Nasdaq 100 had already achieved record-setting returns through the first six months of the year. Over the past quarter, however, the trend has cooled off as stocks have struggled with overhead supply.

The same could be said for the relative trend as growth stocks have paused their advance versus the overall market.

The chart below shows the Nasdaq 100 versus Russell 3000 ratio coiling beneath a critical level of interest.

From the Desk of Ian Culley @IanCulley

Precious metals no longer deserve the benefit of the doubt.

They no longer represent an opportunity cost, either.

No, gold and crew carry downside risk – nothing else!

What changed since last week? 

Gold futures undercut a critical level of interest…

That’s the former commodity supercycle peak marked by the 2011 high.

Check out the monthly candlestick chart of gold futures:

The impressive resilience that’s defined gold and precious metals for most of this year has given way to overwhelming weakness.

Sellers have cracked the 1,923 level and any bullish conviction for these shiny rocks.

We can’t own gold, gold mining stocks, or precious metals more broadly – at least not now.

Gold and silver triggered sell signals last week. I’ve highlighted critical areas of former and potential support.

Those levels stand. Review the chartbook below and today’s Gold Rush video for updates. 

It’s not all doom and gloom for the gold bugs, though. In fact, gold is likely carving out a multi-year base with a bullish bias:

Nevertheless, if that...

We've adjusted a position in the Paid-to-Play portfolio today:

From the Desk of Steve Strazza and Alfonso Depablos

The largest insider buy on today’s list comes in a Form 4 filing by Paul Pittman, executive chairman of Farmland Partners Inc $FPI.

Pittman revealed an FPI purchase worth roughly $1 million.

From the Desk of Kimmy Sokoloff

Futures were up overnight, and then poof, we're now back to flat.

Remember, the market couldn't get going on Friday...

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

From the Desk of Ian Culley @IanCulley

I need to set the record straight.

Earlier in spring, I wrote a note highlighting wheat’s tendency to lead crude oil at key inflection points.  

While this statement is mostly true, it needs clarification.

Chicago wheat does have a tendency to lead crude oil at significant market tops. But crude leads at critical troughs.

Check out the crude oil overlaid with Chicago wheat futures:

Notice crude bottomed in Q1 of  2009, 2016, and earlier this year. Chicago wheat followed roughly six to nine months later, marking critical turning points in late Q3 of 2009 and 2016.

Will wheat do the same in 2023? 

I don’t know. But strong seasonal trends are clearly at work in both markets. 

And if crude oil’s rally provides any indication, I have to lean toward "yes." 

Here are crude oil futures breaking out of a multi-month base...

From the Desk of Kimmy Sokoloff

The market gapped up this morning, and then the indices dropped into their respective gaps.

We'll know more next week about whether this rally will continue...