Whether markets are full of chop or trending higher, bonds offer a versatile haven for our portfolios.
Take a look at inflation-protected securities, commonly known as TIPS.
In inflationary environments, these outperform the government bond market.
We think it’s happening now and our intermarket analysis is telling us to buy TIPS.
If you take a look at the chart of the TIP ETF against the 10-year bond ETF, you’ll see consolidation above long-term support. One thing we know about these kinds of consolidations is that they tend to follow through in the direction of the primary trend.
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.
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.
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.
Nowadays, to make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.
The market keeps squeezing short sellers out of their biotech positions and rewarding bulls with big breakouts.
Knowing this, our strategy is simple. We want to keep buying the best-looking and most heavily-shorted biotech stocks.
Today, we're covering one that has rallied nearly 200% since late last year. Despite this extreme upside momentum, the stock still has a massive short interest.
With the stock resolving a multi-year accumulation pattern, we think this short squeeze has plenty of room to run. To get back to the all-time highs from just a few years ago, it would require about a 10x.
We're looking for something much smaller and quicker for now, but you never know!
Let's talk about how we're trading our latest Freshly Squeezed setup.
Last week, we discussed China and Gold futures as potential catalysts for resolving a multi-decade basing pattern in Dr. Copper.
If we're in an environment where Copper futures are printing fresh all-time highs, then we should spend some time identifying opportunities in the equities market that benefit from rising base and industrial metal prices globally.
Over the last 6-months, the Steel $SLX, Copper $COPX, and Metals and Mining $XME ETFs have underperformed the S&P 500:
With stock market investors looking every which way at different market-moving headlines today, let's take a step back and talk about what's really important.
We just got monthly candles. It's time to zoom out.
And when we do, is there a chart more important than the US Dollar Index $DXY right now?
The dollar has had a very strong inverse correlation with stocks and other risk assets for several years now.
Equities have done well for the past two years while the dollar has been rangebound.
Just imagine how they'll do if DXY breaks down from its current range:
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.
When it comes to our short-squeeze universe, the best trades tend to come from the junkiest stocks.
In late 2022, we went dumpster diving for the most beat-up and heavily shorted stocks in the market and had some big winners. We were at the depths of the bear cycle, and the charts looked terrible. They were supposed to be zeros, but they weren't.
Just look at how Carvana $CVNA has performed since we were buying it at 8.25 almost 2-years ago.
Another junky group that has been working recently is the Marine Shipper industry.
Our custom Marine Shipping Index is on the verge of reclaiming the 61.8% retracement of its prior drawdown:
