Welcome back for another Top Down Trade of the Week.
This is a classic leadership scan.
We start with the best sectors, then drill into the subgroups. We pick one, and then take a look at the top stocks in it.
This week’s standout is Industrials, climbing to the number two spot in our sector rankings.
Technology keeps leading, but other areas are starting to catch up.
The industrial sector is one of the best gauges of overall market health. It’s the most diversified group and has the highest correlation to the major averages.
I like to call Industrials the “generals” of the market. When they march higher, it means things are good for risk assets more broadly.
On the other hand, Materials also jumped three spots this week, showing renewed strength from the cyclical corners of the market...
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...
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 this one, 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 TheJunior 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.
This Independence Day weekend, let's seek freedom from guilt.
As a trader, I carry around a lot of guilt.
Guilt for missing a huge winner.
Guilt for not getting out sooner.
Guilt for not holding long enough.
Guilt for using the wrong strategy.
Guilt for being late to a major turning point.
It’s a long list. And it’s heavy.
This guilt doesn’t just live in the rearview mirror. It follows me into the next trade. It clogs up my decision-making. It makes me hesitate when I should act. It whispers, “Don’t screw this one up too.”
Can you relate?
Lately, I’ve been working on something that I think might help: forgiveness.
Not the fluffy, wishy-washy kind. But real, honest, intentional forgiveness.
Forgiveness for not being perfect.
Forgiveness for being human.
Forgiveness for not catching every move.
Because here’s the thing — I can’t catch every trade. It’s impossible. Especially in a bull market like this one, where new setups are popping up everywhere. There will always be winners I miss. There will always be hindsight that makes me wince.
Stock markets all over the world are parading to fresh highs. From Europe to Asia, the world’s major benchmarks sit at – or within a stone’s throw of – all-time or cycle highs.
Stateside, the Nasdaq 100 printed a new all-time high, and the S&P 500 followed a few days after.
Leadership groups are breaking out in unison. Down the risk curve, speculative growth is screaming and semis are back in the driver’s seat.
One bull flag after another keeps resolving higher.
And most importantly for today's note— the laggards keep catching up to the leaders.
But there’s one group that just hasn't shown up yet… and quite frankly, the bull market can’t rage on without them. I’m talking about a group of stocks SO important, they literally have to join the party. Otherwise, it throws a wrench in the entire bullish thesis.
In this scan, we look to identify 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 to becoming the market behemoths they are today.
When you look at the stocks in our table, you'll notice we're only focused on Technology and Growth industry groups such as Software, Semiconductors, Online...