Stock prices don't move based on "fundamentals".

Prices move based on positioning.

When investors are primarily on one side of a market, the pendulum swings to the other extreme.

One of my heroes John Roque said it best, "We're not in a reversion TO the mean business, we're in a reversion BEYOND the mean business".

In other words, from extremes in positioning, the market doesn't just go back to the average positioning. It tends to continue towards the other extreme.

This is the situation we currently find ourselves in as investors.

This is one of the biggest questions we want to ask ourselves right now.

How many ounces of Silver does it take to buy just 1oz of Gold?

The answer is that it's currently too many.

Here is the Ratio between Gold and Silver, overlaid with a 200-week moving average just to smooth out the data better.

From the Desk of Steve Strazza @Sstrazza

Welcome to The Minor Leaguers.

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 now, 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 new highs in order to...

From the Desk of Ian Culley @IanCulley

Investors are dropping gold and silver like they’re hot.

But don’t let the sellers push you toward the exit.

It might look ugly, but a corrective period following gold’s vertical rally to our initial target sounds about right.

Plus, three of our current long positions – Harmony $HMY, Wheaton $WPM, and Kinross $KGC – posted new 52-week highs Thursday. 

I expect the new highs list to expand as gold and silver work through overhead supply in the coming months.

Instead of sweating today’s selling pressure, I’m placing orders to buy the following two mining stocks on a breakout…

As we've discussed here plenty, this year is very different than last year.

Remember in 2023 when breakouts would stick and prices of stocks and ETFs would keep heading higher?

That's not happening these days.

It's actually been the opposite.

The bigger question for me is whether these new trends are here to stay, or if at some point the stock market reverts to those longer underlying uptrends that got us here.

Another question I have is which mining companies are going to lead their groups as metals continue to make new highs.

Here's a good way to view it. This is Gold breaking out of a decade+ long base to new all-time highs, resuming its secular uptrend from the 2000s.

Have you counted how many stocks and sectors put in failed breakouts?

Market breadth has been deteriorating so fast that most of the "breakouts" that everyone was so excited about last quarter are all failing one by one.

It's pretty nasty out there.

That's what happens when you get aggressive and buy stocks while breadth is deteriorating in your face.

I've seen this too many times to get fooled again.

You're seeing a lot of first timers out there who haven't learned this yet.

One of the better examples is in the Equally-weighted S&P500. Look at this nasty failed breakout.

How's the stock market correction treating you so far?

The Nasdaq100 is only up 1% this year, underperforming a typical year for the market by a long shot.

The Dow Jones Industrial Average is flat for 2024.

The Russell2000 Small-cap Index $IWM is still down this year.

Emerging Markets $EEM are down.

Meanwhile Gold is up 15%. Silver is up 20%.

In fact, the Dow/Gold ratio just hit new 3-year lows this week:

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

The media is showering gold and precious metals with attention.

I get it. New all-time highs capture eyes. 

But you can’t leave copper and base metals out of the story…

Copper is ripping to its highest level in almost two years, posting a 15% year-to-date gain:

For perspective, the S&P 500 is up less than 5% since January 1.

Our next profit target of roughly 4.85 is now in focus. A decisive break above this new objective sends copper toward new all-time highs and the psychologically important five-dollar level.  

Perhaps the headlines will show Dr. Copper a little love if it trades at five bucks. (It’s tough being a commodity, even during a bullish supercycle.)

I won’t wait in vain for copper or any other base metal to gain recognition. Nevertheless, tin...

From the Desk of Alfonso Depablos @AlfCharts

2024 is far from being like 2023. 

While we’ve experienced some healthy sector rotation, the first quarter was characterized by waning momentum.

With these long-standing momentum divergences in place, so far, the second quarter has been characterized by selling pressure. 

Since last week, we’ve seen an increasing number of these divergences confirmed by price. 

Making matters worse is where this downside is taking place. We're also seeing a growing list of indexes and sectors lose key former highs.

Until the bulls can reclaim these polarity zones, markets will remain messy. 

Let’s talk about some of them.

From the desk of Steve Strazza @Sstrazza

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. 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.

Then, we sort the remaining names by their proximity to new 52-week highs.

This leaves...

You can now add the Dow Jones Industrial Average to the list of indexes that are DOWN for the year so far.

I've argued many times that the Dow Jones Industrial Average is the world's most important stock market index.

And while I'm not going to get into all the reasons again today, I'll just show you the chart of the S&P500 and Dow Jones Industrial Average going back 60 years.

They move together...