Headlines.

We all read them and they mess with our heads. It takes steadfast resolve to listen to the message of price action when everything else we read tries to trick us into doing the wrong thing.

The best way to keep ourselves level-headed when taking risks is to define that risk and trade small. There are few things more powerful than knowing with complete certainty the most I can lose, no matter what the market throws at me.

With this in mind, we're putting on a trade today in a stock that has the potential to be a real highflier if the markets stabilize and head higher following any Washington drama while limiting our risk in case we're early or wrong.

From the Desk of Ian Culley @IanCulley

Here we go again… 

The USD/JPY is breaking out.

I can’t think of a stronger trend than the dollar-yen last year. It absolutely ripped to the point we were joking everything priced in yen looked good – even gold!

But it wasn’t the only market trending higher at the time. The US dollar and interest rates also rallied together.

Today’s USD/JPY strength raises a painful question for many investors…

Will interest rates and the US Dollar Index $DXY follow?

Before we delve into the broader implications of a USD/JPY rally, let’s outline the setup for those who trade forex markets.

Check out the dollar-yen reaching its highest level since November 2022, completing a six-month consolidation:

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The Technology Index made another new 52-week high on Monday.

This is becoming a habit.

Apple carries a huge weighting in that Index.

So as some people get distracted with how Apple's $2.75 Trillion market cap is now bigger than the entire Russell2000 Index, I'm more interested in how quickly Apple can get to $5 Trillion.

I think it can happen pretty soon.

Look at these massive moves in market cap that can happen in a relative short period of time.

From the Desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to...

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...

The bears have found a new home: gold mining stocks.

Silver’s breakdown earlier this month raised the caution flag for the entire precious metals space. 

Less than two weeks later, gold futures and mining stocks are falling under the wrath of increased selling pressure. Precious metals bears are winning the battle as support levels fall to the wayside. 

Meanwhile, the bulls are reluctant to leave without a fight…

Some things are changing.

Have you noticed?

Let's keep something in mind. During healthy market environments, you historically see correlations falling.

It's when volatility spikes in bear markets that correlations all go to 1.

So are these recent divergences just further evidence that this is a strong market for stocks?

The breadth expansion and sector rotation we keep seeing certainly points to that.

So let's take a look.

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.

I've been at this for 20 years. I've seen a lot of uptrends and bull markets in my day. I've studied many more that came before me.

Along the way, do you know what you'll find a lot of in bull markets?

New 52-week highs.

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. You can click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

Click table to enlarge view

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month. ...

From the Desk of Ian Culley @IanCulley

Tech stocks don’t care about the manufactured debt limit crisis. Nor are they bothered by the increasing probability of a rate hike next month.

Growth stocks seem concerned with only one thing – printing fresh highs.

The Tech sector ETF $XLK posted new 52-week highs yesterday. And the Communications ETF $XLC rallied within reach after taking out its Aug. ‘22 pivot highs. 

So where does that leave bonds and other long-duration assets? 

If these base breakouts across growth sectors hold, I imagine bonds have some serious catching up to do…

Why?

Growth stocks tend to trend with bonds since they’re both long-duration assets. Changes in interest rates directly impact US Treasuries and affect tech stocks more than other equities.

Check out the tight relationship between the Long-Term Treasury ETF $TLT and the Technology sector $XLK:

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