From the Desk of Steve Strazza @Sstrazza

Stocks with high short interest are proving resilient, even in challenging market conditions, as the bears struggle to drive down even the most hated names.

With this in mind, it's time for another Freshly Squeezed report.

Here's our approach:

We find the most heavily shorted stocks in the market. Then, we monitor these names for signs of upward momentum. Once that momentum kicks in, we ride them higher as the bears get squeezed.

We got fresh short data on Friday, so let's dive in and talk about it.

Our scan is quite simple. It is designed to identify stocks with the most aggressive short positions.

When a stock is shorted, it means incremental buyers are waiting in the wings to close out their bearish bets.

We love this, as new buyers are the one true catalyst for higher prices.

When shorts are proven wrong, they become buyers of the stock. In many cases, this happens as momentum flows into these names and fuels massive short-covering rallies.

For this reason, we pair short-interest data with short-term momentum overlays, as this...

In today’s Daily Digest, we’ll review the following:

1. New position in XLP.
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.

Let’s dig in!

Despite any selling pressure in stocks over the past few weeks, the Nasdaq Inc continues to push to new 52-week highs, again.

This is a trend that has been in place.

The Capital Markets stocks, which are part of the Financials universe, continue to be leaders in this bull market.

The most significant insider buy on today’s list comes via a Form 4 filing by Jerry Jones, the owner, president, and general manager of Dallas Cowboys.

Jones made an additional purchase of $25 million in Comstock Resources $CRK.

Cathie Wood’s infamous ARK Investment Management filed an initial 13G for 10x Genomics Inc $TXG revealing a 10.75% stake.

Here’s The Hot Corner, with data from August 12, 2024:

In another Form 4, Greenoaks Capital Partners LLC revealed a $21 million purchase in the South Korean e-commerce company Coupang Inc $CPNG.

MFN Partners revealed an initial stake of 6.30% in CNX Resources Corporation $CNX.

CPNG is on the verge of completing a primary trend reversal, as price reclaimed a critical level of interest:

From the Desk of Ian Culley @IanCulley

Don’t believe the headlines.

It’s not all doom and gloom for the market.

Plenty of assets are trending higher, mainly those related to precious metals.

Gold is challenging all-time highs. Silver is catching a bid. Palladium is digging in at former support. (So much for those seven-year lows.)

And gold and silver mining stocks are ripping…

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.

Nowadays, 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 new highs in order...

From the Desk of Ian Culley @IanCulley

Don’t believe the headlines.

It’s not all doom and gloom for the market.

Plenty of assets are trending higher, mainly those related to precious metals.

Gold is challenging all-time highs. Silver is catching a bid. Palladium is digging in at former support. (So much for those seven-year lows.)

And gold and silver mining stocks are ripping…

When the storm is upon us, it's too late to purchase hurricane insurance. Nobody will sell it to you. Of if they will, the prices will be obscene.

Last Monday, when the VIX printed a 65 -- it was too late to buy downside protection. If you did, you were asking for your face to be ripped off. And it likely was.

Now that the dust has settled a bit, volatility has abated significantly, and the relative winners and loses sorted themselves out, we're seeing some good setups to position ourselves for any additional downside action.

Additionally, it offers me a good chance to balance out some of the risks I still have on the books in my long positions.

On today's Flow Show, me at Steve Strazza talked about a good setup in Advanced Micro Devices $AMD that fits our needs.

In today’s Daily Digest, we’ll review the following:

1. New position in GDX.
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.

Let’s dig in!

Today's most significant insider transaction was disclosed in a Form 4 filing by ZoomInfo Technologies $ZI CEO Henry Schuck.

Schuck reported an acquisition of 1,500,000 shares, equivalent to $12.7 million.

PointState Capital filed a 13G for WESCO International $WCC revealing an initial stake of 5.00%.

Here’s The Hot Corner, with data from August 9, 2024:

In another Form 4, Stellantis NV revealed a purchase of $9,989,998 in Archer Aviation Inc $ACHR.

Control Empresarial de Capitales S.A. continues to build a position in Talos Energy Inc $TALO and PBF Energy Inc $PBF.

In Washington, Rep. Ro Khanna of California disclosed purchases of between $15,000 and $50,000 in the following stocks:

• Apple Inc $AAPL;
...

From the Desk of Ian Culley @IanCulley

Here’s what happened last week...

A few bad actors used open profits from highly leveraged positions to purchase other assets.

When those highly leveraged positions turned against them – ripping their faces off – margin calls went unanswered, leading to a lack of liquidity.

Bonds ripped, stocks dipped, and credit spreads blew out. 

Now that the dust is settling, let’s review a few takeaways from last week’s volatility and consider what may lie ahead.

Credit Spreads Had it Right

Bonds hinted at a stock market correction months ago as widening credit spreads failed to confirm new all-time highs.  

The increasing stress on credit markets culminated in the High-Yield $HYG versus US Treasuries $IEI ratio blowing out to its lowest 14-day RSI reading since September 2008:

I doubt the market is heading toward a GFC-esque selloff, but the comparison...

From the Desk of Steve Strazza @Sstrazza

Have you heard about the rally in the bond market?

After a severe multi-year drawdown, bonds have carved out a massive basing pattern and are putting the finishing touches on a primary trend reversal.

More importantly, interest rate-sensitive stocks are following suit and rallying higher as rates come down.

The sector with the highest correlation to bonds, Real Estate, is also putting the finishing touches on a bearish-to-bullish reversal.

With the market under pressure in recent weeks, Real Estate's relative strength and resilience stands out in a big way.

This once left-for-dead group of stocks is now the sector leader over the trailing month and quarter.

The only responsible thing for us to do is dive beneath the surface and find the strongest individual names to use as vehicles to play this trend.

Before we do that, let's set the stage.

Here is a look at those multi-year bases in bonds and real estate. Notice how they look the same:

If these...

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.

I love it when a group of people dislike a stock for reasons that have nothing to do with the stock itself.

In some cases it's because they don't like the CEO, or they don't like the politics of the players involved, or they think the stock is some kind of fraud.

In the case of Palantir, you're getting all 3 of these.

We love it when a stock hitting new 52-week highs makes people sad.

That built-in short-squeeze scenario is just added fuel to the fire to send stocks much higher, much faster.

Here is PLTR hitting new multi-year highs this week:

I was in the city this week hanging out with my pals Josh Brown, Michael Batnick and Joe Fahmy.

For some perspective, 10 years ago in March of 2014, the 4 of us went out one night to support some other friends of ours at a charity event. I met my future wife that night. 

These 3 guys mean a lot to me. But don't let my love for them fool you. When they say something dumb, I'm going to call them out on it!

Check out the full podcast episode that just dropped last night on The Compound & Friends.