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...

Thanks to everyone who joined us for today's Hot Corner Insider Weekly Strategy Session.

One major theme this week is the fact that the largest companies in the world are breaking out, setting up for the next leg higher.

After six months of chopping around, Apple $AAPL broke out to new all-time highs:

We think this move in AAPL could set the tone for the rest of the mega-cap space to follow.

Meta Platforms $META is doing the same thing:

The best players are stepping up and getting back in the game.

We think Nvidia $NVDA will be back at new all-time highs soon as well:

Nancy Pelosi has been riding this megatrend higher long before anyone was talking about AI.

This is exactly the kind of action you want to see in a healthy bull market.

The...

We talk a lot around here about taking half off the table either when our position doubles in value or we hit a key price target.

It's a great position management practice that increases our win rate while leaving us with partial positions to participate in truly outstanding runs.

But we haven't talked much about alternative ways to "take half."

What if we can take half of our directional risk off the table while leveraging gamma to keep the majority of our open profits in the case of a market reversal, and participate almost fully in a truly massive breakout?

Sounds nice, right?

A situation like this is presenting itself in our current open position in $CM Dec 55 calls. We entered this position in August and now our in-the-money calls are approaching expiration on December 20th.

Here's the chart:

Normally, I would simply trail a tight stop loss in trades like this heading into expiration. In fact, I wrote about doing exactly that in this trade earlier this week. 

But then someone in the All Star Options chat room mentioned that $CM had an earnings announcement coming up before the opening this Thursday (...

SoundHound is trading around 10x today. We paid $0.30 for these calls on October 14th, and they are worth about $3.20 today.

Since the calls were cheap, we bought more than we usually do in order to size the position appropriately.

This is always nice as it gives us the flexibility to scale out of the position. In other words, if we only buy two calls, and we sell one on the double, then we have no choice but to close our entire remaining position at the same time.

In the case of SOUN, calls were only $30 per contract, so I own a larger quantity than usual. I’m going to take advantage of this and scale out over time. I did the same thing with PTON when that position went more than 10x.

I’m selling 50% of my remaining position today (or 25% of the original position). I think it is a good rule to always sell something at 10x. Ideally...

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

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

Let’s dig in!

Last night was our LIVE Monthly Charts Strategy Session for Premium Members of ASC Research.

This 2-times per month LIVE event is one of the biggest reasons why most of the world's largest financial institutions that you've ever heard of come to Allstarcharts for help making big decisions in the market.

One chart that really stood out to me, especially considering where we are in the cycle, is just how many bears there are among individual investors.

In fact, despite the new all-time highs in the S&P500, Dow Jones Industrial Average, Nasdaq100 and Russell2000 Indexes, there are...

Today's note is brief.

For the second day in a row, M. Grier Eliasek, President and COO of Prospect Capital Corporation $PSEC, disclosed a significant insider buy – 210,000 shares, totaling $1,010,058.

Here’s The Hot Corner, with data from December 3, 2024:

These c-suite leaders typically have the most insight into the business's health and prospects, making their investments worth paying extra attention to.

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...

Today's number is... 20%

What happens after a 20% or more up year in the S&P 500?

With only 19 trading days remaining in the year, the S&P 500 has increased by 26.8%. So, it seems that 2024 could finish with a gain of 20% or more.

Here is a table with all of the 20% or more up years, along with the following year's returns:

(right-click and open image in new tab to zoom in)

The Takeaway: Since 1950, there have been 19 instances where the S&P 500 finished the year with gains of 20% or more.

Of that, the stock market experienced positive returns in 15 out of the 19 years following a 20% or more gain, which is 78.9% of the time. Conversely, it was down in 4 out of those 19 years, representing 21.1% of the time. 

On average, the return following a year with a 20% or more increase was 9.6%. In years that were up years, the average gain was 15.4%. In contrast, during down years, the average loss was recorded at -11.9%.

From the data, it’s more likely that we will see strength...

In today's Flow Show, Steve Strazza and I discuss the signal (if any) being sent from $VIX with a 13 handle, and we cautioned viewers to not just automatically think that a low VIX means the next spike is imminent.

Then, we got into the opportunity that looks most appealing over the next 6-12 months. 

You can watch the full episode here and get the trade details below: 

Apple has been in a year-long range (see video) that appears to have been decisively broken. 

Here's a zoomed-in one-year chart showing the current breakout about the 234-235 range:

While it may feel like a bit of a chase here, I've got a plan to get us positioned small now, with the potential to get systematically larger into a pull back.

If we don't get the full position on, then at least we'll have a small winning position on that took no heat. In other words, a great risk-adjusted return!

Here's the Play:

I like buying $AAPL December 2025 300-strike calls for approximately $7.50. With options volatility relatively cheap in this name, these calls...

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

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

Let’s dig in!

Today's standout insider transaction is a Form 4 filing from Carlos Slim's Control Empresarial de Capitales S.A., which added another 604,000 shares of PBF Energy Inc $PBF to its position.

Meanwhile, the chief operating officer of Prospect Capital Corporation $PSEC stepped up with a $1 million buy, following the CEO’s notable purchase in the last two weeks.

Here’s The Hot Corner, with data from December 2, 2024:

Newmont Corp $NEM director Harry M. Conger IV recently picked up 9,498 shares of the company’s common stock.

It's always good to see heavyweights in the gold mining space get the attention of excecutives.

Last but not least, Rep. Jonathan Jackson of Illinois...

Today's number is... 12

We have entered December, the 12th month of the year, which happens to be my favorite month! It's summer here in Australia, meaning the days are warm and long. This gives me plenty of time to play golf in the afternoon… and let's not forget that Santa comes to town!

More importantly, stocks tend to perform well in December.

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what this chart shows:

• This blue line represents the average return for December since 1950 for the S&P 500.

The Takeaway: Yesterday, I shared a note about...

Participation continues to expand across the board as more sectors and industries break out to new cycle highs.

The SPDR S&P Retail ETF $XRT is the latest example of this theme.

Here’s a look at XRT completing a textbook bearish-to-bullish reversal.

After spending nearly three years in the base-building process, buyers are finally taking control and kicking off a new uptrend.

This is the same bullish pattern we’ve seen so many times in this bull market. We’ve watched these formations take shape and resolve higher one after the next over the past few years. We don’t expect the retail index will be any different from those that came before it. 

The path of least resistance is now higher for XRT.

Retail stocks deserve a spot on our radar, and it’s time to identify the best opportunities in this space.

Alfonso

When we look back and discuss the bull market that began in 2023, what will we say?

I think we will talk about the artificial intelligence revolution and all the technology stocks that benefited most from it.

Maybe we will say this is when Nvidia changed the world and paved the way for so many new innovations and efficiencies.

I think there’s a good chance we’ll be talking about some other companies we haven't even heard of yet.

I don’t know how this story will end, but I do know it will be all about AI.

That should be clear to everyone by now.

And while I may not be the most tech savvy guy, I know the rise of AI has everything to do with advanced computer chips made by Nvidia and others.

As they say, you can’t have a party without the chips.

And the chips have really fueled the current bull market party. SMH rallied more than 3x in about a year and a half, kicking off the new bull market. 

It is still one of the top-performing industry groups this cycle, despite going sideways for the last six months.

...