Welcome back for another Top Down Trade of the Week. 

This one’s 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, Energy is the big standout—jumping to the top of our sector rankings. 

Healthcare and utilities also made a big move up on the leaderboard as growth sectors faltered. 

Here is a look at our overall industry rankings, which shows oil & gas cracking into the top 10.

It’s not a surprise to see it there—crude oil has been squeezing higher, posting its best week since October 2022.

That kind of price action tends to light a fire under energy stocks, and that’s exactly what we’re seeing.

Let’s get one thing straight… I’m not some sort of defense industry perma bull.

Trust me, those people exist.

They hang out in the same circles as the ‘end-of-days’ folks, national debt doomers, and gold bugs.

It’s just not for me. I’m an optimist.

However, I’m also a good old-fashioned trend follower.

And these stocks have taken on a new leadership role, so we’ve been buying them. Here is Aerospace & Defense relative to the S&P 500:

This base breakout is in the books, and the path of least resistance is now higher for this ratio. All that means is expect more outperformance from these stocks over longer timeframes.

But I’m most interested in making money right now. This week, this month, this quarter.

And as I flipped through the A&D components today, there was one chart that I just...

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...

The multi-year distribution patterns in energy are failing and hooking higher.

And from what I understand, it’s been confusing for some people.

I get that. If you’re one of them, keep reading; we’ll unpack it all.

But first, here’s something from a note I wrote on energy last month.

“I’m making the bet that crude scoops and scores here. I think it should look a lot more like its derivative plays soon, back in its old range. And I think we can get a fast move back toward the upper bounds from there. I’m talking about a big rally that sends crude back to the 80s or 90s”.

Why in the world was I feeling so warm and fuzzy about crude oil? 

It was just completing a massive top. What a naughty technician I must be. What was I thinking?

From the desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

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...

One of the top-performing areas of the speculative growth theme has been the “new-school” nuclear trade. 

OKLO already tagged one target, SMR is on its way, and NNE is coiled and wants next. 

Click the link to read our nuclear energy deep dive.

These have been some of the top stocks off the April lows, and now the old-school names like Cameco $CCJ are powering higher too.

What I’m saying is the entire nuclear space is red-hot, and I want more of it.

Here’s the VanEck Uranium & Nuclear ETF $NLR breaking out to its highest level since 2008.

After a 50% move in two months’ time, one might think this trend is extended, but it’s not. 

This is a fresh breakout over longer timeframes, and price should keep climbing...

All things equal, I want the one that shook out the weak hands… before it left the station.

I want the one that bears had a clean chance to bury… but couldn’t.

I want the one that just trapped the shorts… then squeezed higher.

Bull hooks. Bear traps. Scoop ‘n scores. Shakeouts.

These are all powerful patterns, and are all similar because they are centered on the same thing…

Failed moves.

This is when price violates a key level and quickly reverses in the opposite direction.

“From failed moves come fast moves” is how I learned it.

And that’s exactly what is happening with Bitcoin $BTC right now. Here’s a look:

BTC ramped from about 75k to north of 110k in a matter of five weeks off the April lows.

...

We got some nice feedback on our top-down scan from last weekend so I think we’ll make it a regular thing.

This is a clear and simple leadership scan, which is why I like it so much. 

We are drilling down to a trade idea following the traditional top down approach. It doesn’t get any better than that. 

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, Materials is the big standout—jumping two spots in our sector rankings. It’s no surprise. Commodities are on a tear and participation is expanding. This means we should expect more materials stocks to start working. And we’re already seeing it. 

Upon digging deeper, we found Metals & Mining stocks have been doing a lot of the heavy lifting for the sector....

This week was all about the bull flags.

Bonds dug in where they needed to recently.

International equities keep grinding higher with broadening participation.

And then we have the US indexes, which have been sideways, in high and tight fashion, since mid-May.

That changed this week…

The bulls got what they needed as a long list of these coils resolved higher.

We’ve been particularly interested in speculative growth, and ARKK is a great example of this bull flag theme, so let’s go there:

This is the same pattern we are seeing all over right now. A big time advance off the April lows into a 3-4 week continuation pattern.

And if there’s one thing we know about continuation patterns it is that their resolution should mark the continuance of the preceding price trend. Well, that...

Two weeks ago, I wrote about the breakout that was brewing in silver. 

And it wasn’t just about the price action in gold.

There were finally other signals emerging and suggesting higher prices for the precious metal. We just needed to see if those trends had legs. 

The silver/gold ratio is everything when it comes to risk appetite. It’s the oldest intermarket indicator in the world of commodities. Here’s what I said about it:

“If I end up being right about silver, we’re going to see the silver/gold ratio fail this breakdown and scoop higher”.

The writing was already on the wall for an epic bear trap, and this week it fired. 

The silver/gold ratio just had one of its best weeks in history and failed this topping pattern with authority. 

From the desk of Steve Strazza @Sstrazza

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...

From the Desk of Steve Strazza @Sstrazza

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 The Junior 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.

The bottom line is it is a bull market. We...