The market keeps rewarding investors for buying some of Wall Street's most hated stocks. 

We're getting buy signals from biotechnology and crypto stocks, which tends to happen in healthy market environments.

With this in mind, we're going back to the well and buying a biotech stock with nearly 1/3 of the float sold short and a double-digit days-to-cover ratio. 

The stock we're buying is named after what was once an important ancient trade center in modern-day Turkey.

Let's talk about how we're playing this short squeeze:

Each year, Americans buy over 600 million pounds of candy and eat over 1 pound each for Halloween.

It's a lot...

But are there opportunities to profit from Americans ritualistically eating way too much candy? You betcha!

Let's talk about it.

After a historic 190% run earlier this year, cocoa futures have formed a textbook consolidation pattern:

In addition, chocolate bears have failed to register an oversold reading as the bulls have maintained control during this consolidation phase.

We like owning cocoa futures above 6,900, with a target of 11,700 over the coming 2-4 months.

Sugar futures look poised to retest last year's high:

After rallying 20% in a single week last month, the sweet commodity has formed a sweet bullish continuation pattern. If and when this pattern is resolved, we want to own sugar futures in anticipation of a fresh leg higher.

In addition to the chart pattern, the bulls registered a 14-day RSI reading above 80 during the last leg higher, as they were in...

Uranium stocks have been screaming higher and show no signs of slowing down.

As the AI Revolution demands more and more power, big technology companies are turning to nuclear energy.

The market is sending a very clear message... we (as investors) need to increase our exposure to uranium stocks.

Check out the recent performance from uranium stocks:

Each bubble's location is determined by its 10-day change on the x-axis, the trailing 3-month return on the y-axis, and the 14-day RSI is the size.

LEU, OKLO, and SMR are the stocks that stand out the most amongst their peers. Each of these 3 leaders is involved with nuclear energy for the AI boom.

The VanEck Uranium Energy ETF $NLR is decisively resolving a multi-decade base:

This fund holds large positions in the largest uranium stocks like Constellation Energy $CEG, Cameco $CCJ, and BWX Technologies $BWXT.

The breakout to new multi-decade highs is happening as breadth in the industry is expanding.

The GlobalX Uranium ETF $URA has a large Cameco...

From the Desk of Steve Strazza @Sstrazza

We all know how dreadful it can be to get through airport security.

Clear Secure is trying to be the remedy by using biometric data to provide identity verification and expedite security at airports and other venues.

Last quarter, the stock rallied over 20% following its earnings report and has nearly doubled since.

Despite the stock's strong performance and highest price since 2021, the bears are still betting against it. The amount of shares held short is near its highest level in history.

Let's talk about how we're playing it:

From the Desk of Steve Strazza @Sstrazza

What's better than a Bitcoin miner short squeeze?

Some of our best trades have come from these stocks as they can make dramatic moves in both directions.

Our crypto desk recently wrote "it appears this seven month bear market is reaching its concluding stages." 

With that in mind, what're we buying?

We're buying a leader in the crypto mining industry with a double-digit short interest and warrants to juice our returns even more.

Let's talk about it:
 

It has been two-years since the S&P 500 bottomed in October 2022 and stocks began a new bull market. 

During this time, many sectors and industry groups have enjoyed tremendous uptrends while materials stocks have gone sideways.

But materials stocks are starting to look interesting...

The SPDR Materials Sector ETF $XLB is making new all-time highs:

As you can see, the prior cycle high coincides with a major Fibonacci extension level going back to the Great Financial Crisis, which adds to the significance of this breakout.

This market-capitalization weighted fund has a large exposure to Linde $LIN amongst several other bellwether materials stocks.

We want to be long XLB if it's above 93, with a target of 139.

The Materials Sector holds a lot of the same stocks as the S&P Chemicals Index:

The S&P Chemicals Index is consolidating below a major Fibonacci extension level going back to the Great Financial Crisis and we're betting it will breakout to new all-time highs like XLB.

If CEX is above 985, the path of least resistance is higher toward 1,500.

Representing over 17% of the Materials Sector...

From the Desk of Steve Strazza @Sstrazza

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:

However, the weekly RRG is hinting at a potential rotation back into these stocks during this final quarter of 2024. All 3 of these ETFs are pointing higher and rotating out of the lagging quadrant and into the improving and leading quadrants.

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:

The unfortunate thing about most shippers is that they have little short interest.

But they trade like they do...

These stocks can rally several hundred percent in a short amount of time when they trend.

Even better, we're outlining a trade for one of the best-performing Marine Shippers and this one does have a massive short interest. We think this trade could be a multi-bagger.

...

Have you heard about China?

Chinese stocks just had their best week in history, following the People's Bank of China's (PBOC) announcement of rate cuts, among other stimulative actions.

In July, we talked about Copper and its base and industrial metal peers showing broad weakness. But that seems to be changing...

China is the world's largest consumer of refined copper, so base and industrial metals have benefited from the recent pivot from the PBOC.

Chinese stocks and copper futures have been positively correlated for years:

The 200-day rolling correlation flipped negative earlier this year but is positive again and has recently been screaming higher toward its highest positive correlation in history.

This week, the China Large-Cap ETF $FXI decisively broke a multi-year downtrend line and entered a new primary uptrend.

If the path of least resistance is higher for Chinese stocks, the 29th element should also catch a bid.

Earlier this year, Gold broke out to new all-time highs, but Copper...

From the Desk of Steve Strazza @Sstrazza

Welcome to The Junior International Hall of Famers.

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-listed international stocks, or ADRs.

This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.

Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

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

This is our Junior International Hall of Famers list:

Click table to enlarge view

And here’s how we arrived at it…

We removed laggards which are down 5% or more relative to the ACWI Ex. U.S. Index $ACWX over the trailing month.

Then we sorted...

It has been over 1,600 days since Crude Oil futures traded below zero in 2020, which preceded one of its best 2-year bull markets in history.

Since the peak in early 2022, energy has been a tough trade for those with trend-following strategies and a favorable one for mean-reversion strategies.

Crude Oil futures are at the lower bound of a multi-year range, and the Energy Sector SPDR $XLE has the fewest percent of stocks above their 200-day moving average out of all 11 sectors. 

Energy has been a laggard recently.

However, it's important to remember where energy has come from. Crude Oil futures went from below 0 to 130 in less than two years, and the XLE is the second best-performing sector since Covid, lagging only Technology $XLK:

The outperformance has been in the energy sector. Just not recently...

But that could be changing soon with energy futures digging in at major levels of interest.

Crude Oil futures are bouncing off a key level of polarity:

This is what former resistance turning into support looks like...