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2 to 100 Club (08-17-2022)

August 17, 2022

From the Desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing this is by identifying 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...

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Young Aristocrats (August 2022)

August 17, 2022

From the Desk of Steve Strazza @Sstrazza

Dividend Aristocrats are easily some of the most desirable investments on Wall Street.

These are the names that have increased dividends for at least 25 years, providing steadily increasing income to long-term-minded shareholders.

As you can imagine, the companies making up this prestigious list are some of the most recognizable brands in the world. Coca-Cola, Walmart, and Johnson & Johnson are just a few of the household names making the cut.

Here at All Star Charts, we like to stay ahead of the curve. That's why we're turning our attention to the future aristocrats.

In an effort to seek out the next generation of the cream-of-the-crop dividend plays, we're curating a list of stocks that have raised their payouts every year for five to nine years.

We call them the Young Aristocrats, and the idea is that these are "stocks that pay you to make money."

Imagine if years of consistent dividend growth and high momentum and relative strength had a baby, leaving you with the best of the emerging dividend giants that are outperforming the averages.

By adding our...

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Stay Short the Euro

August 16, 2022

From the Desk of Ian Culley @IanCulley

As I scrolled through my currency charts this weekend, the same three-word phrase kept popping to mind: "Can’t be short!"

Whether it’s the Swiss franc, the British pound, or the Thai baht, we can’t be short most global currencies against the US dollar. Not at current levels.

There is one major exception. It’s the euro.

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[Premium] Mid-Month Conference Call Video Recording August 2022

August 15, 2022

This is the video recording of the August 2022 Mid-month Conference Call.

We discussed:

  • Seasonally, this is the time to buy stocks
  • S&P500 above key support
  • More new highs than new lows for the first time in 2022
  • Is Year 3 about to get started? What do other Year 3s look like?
  • Average NYSE stock is up 33%, average Nasdaq stock is up 42%
  • Financials Bounce Off Pre-GFC highs
  • Russell2000 & Nasdaq100 above AVWAP off Covid lows
  • Gold & Silver Miners down near multi-year relative lows
  • A little Dollar weakness sparked a huge risk-on rally
  • New multi-month highs for Discretionary vs Staples
  • Apple highest S&P500 weighting of any stock ever
  • Free ride in Facebook through the end of the year
  • Healthcare plans setting up: $UNH $HUM $CNC $CI
  • Breadth Expansion in Industrials
  • Indian Banks are the leaders in Banking
  • Energy stocks below overhead supply - work to do
  • Which coal stocks are we buying
  • Lithium continues to act strong, in US and outside US
  • Defensive Sectors...
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The Minor Leaguers (08-15-2022)

August 15, 2022

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...

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Follow the Flow (08-15-2022)

August 15, 2022

From the Desk of Steve Strazza @sstrazza

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 stock is about to move in...

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Commodities, Ya Dig?

August 12, 2022

From the Desk of Ian Culley @IanCulley

It doesn’t matter where you look: Commodities are digging in, finding support, and reclaiming key levels.

Grains, softs, base metals, and energy have all stopped going down. Even gold is bouncing off critical levels of former support.

But it’s not just the fact the commodity correction is hitting the pause button that’s important.

It’s where it's happening.

Let’s take a look at a few charts.

First we have cotton futures:

Cotton completed a monster base, breaking to fresh 10-year highs last October. A strong advance took hold during the following months.

But it was answered by a near-vertical decline back into its prior range.

After falling more than 45% from its May peak, cotton is reclaiming a key level of former resistance marked by its 2014, 2018, and 2021 highs.

That shelf of former highs kept a lid on cotton prices for almost a decade. And the 2018 highs...

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The Hall of Famers (08-12-2022)

August 12, 2022

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 which you can check out here.

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 filtered out any laggards that are down 5% or more relative to the S&P 500 over the trailing month. 
  • We sorted the remaining...
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HY Is Hitting Higher

August 11, 2022

From the Desk of  Ian Culley @Ianculley

More pieces of the puzzle are falling into place for the bulls.

We’ve been pounding the table about the dollar and rates for months, and now they’re starting to take shape.

On Wednesday, the US Dollar Index $DXY broke to fresh lows, violating a multi-month trend line.

And interest rates… well, they haven’t moved much. They continue to hold their range after peaking in June. 

As expected, stocks surged yesterday in response to a weaker dollar and stable bond market. 

But stocks aren’t the only risk assets on the rise. Investors are moving out on the risk curve and bidding up high-yield bonds, too.

Here’s a dual-pane chart of the Fallen Angel High-Yield Bond ETF $ANGL and the S&P 500 Index $SPX:

ANGL is one of our favorite high-yield bond ETFs because it contains the...

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The Short Report (08-10-2022)

August 10, 2022

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as “a market of stocks.”

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we’re also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

We...