From the Desk of Ian Culley @IanCulley

I don’t care what your favorite TikTok financial guru says: Trading isn’t easy.

The market has made this point again and again this year.

The market has also driven home another essential truth: Trends persist.

I talk about this approach quite a bit because I’m a trend-follower. It’s my favorite Dow Theory Tenet, and it's the foundation of my approach to the markets.

Trend-following might sound simple. But it’s far from effortless. Like any worthwhile philosophy, real-world applications can sometimes be a struggle. 

In fact, no other market has tested my trend-following resolve quite like this year’s unstoppable dollar. And I’m still looking for opportunities to get long…

From the Desk of Kimmy Sokoloff

Today was more of a consolidation day for the market. I'd prefer that the SPX hangs onto 3,669, which it did (and hopefully does in the days ahead).

It would be nice if we saw the recent bottom become a tradable low from which we trend higher.

From the desk of Willie Delwiche.

Feeling More Like The Financial Crisis

Mortgage rates are soaring and housing market conditions are deteriorating. Sentiment is sour in both the financial markets and the economy.

The Numbers: Expectations for home selling conditions are at a level that have been seen leading up to, through, and in the wake of the financial crisis. This isn’t an isolated report and its both sides of the market. Data from the University of Michigan shows that the fewest survey respondents since the early 1980’s see this as a good time to buy a house (and that was prior to the most recent spike in mortgage rates).

Why It Matters: Economic sentiment, whether on buying houses or CEO confidence, is usually self-fulfilling. This may seem to be at odds with the idea of using sentiment as a contrarian indicator, but it isn’t all that different. We can look at past sentiment extremes to gauge the possibility that moods have moved too far, but it takes bulls to have a bull market in the same...

This is the video recording of our October 19, 2022, Inside Scoop Weekly Strategy Session.

It's that time of the quarter where we options swing traders need to be extra mindful of pending earnings releases. The last thing we want to do is place a directional bet in a stock or it's options heading into a binary event that could decapitate us in a heartbeat.

This is frustrating us right now because most of the charts we like best (both the bullish and bearish ones) are in stocks with earnings slated to be released in the next week or two.

During our morning Analyst meeting today, we discussed the fact that many of the banking/financial sector stocks have already reported earnings by now, therefore, this is a place we should look.

Specifically, we like the big money center mega/multinational banks that are represented best by the $KBE ETF. Here is a chart that paints a pretty good picture of why we like it:

The next new position in our Paid-to-Play portfolio is:

It wasn't long ago that we said Bitcoin was at the edge of the abyss.

A month on, the same can still be said about most of the asset class. Just go chart by chart, and you'll see a ton of coins sitting at their lows.

This is such an illiquid tape, with only the heartiest of HODLers remaining, that it wouldn't take much selling to send these laggards on another leg lower.

Cardano, Decentraland, Gala, Kyber, Polkadot -- just a little push is all it'd take...

From the Desk of Kimmy Sokoloff

I spoke in the live trading room yesterday about how $NFLX earnings, either good or bad, has not really affected the market recently.

The futures did bounce last night, but this morning we're roughly flat.

From the Desk of Kimmy Sokoloff

The market gapped up this morning and came back to fill yesterday's high.

The market overall bounced off of that gap-fill and held steady until news came out on $AAPL late afternoon.

From the Desk of Steve Strazza @Sstrazza and Alfonso Depablos @AlfCharts

While the S&P 500 and other major averages made new lows last week, fewer stocks made new lows beneath the surface. 

Not only is downside participation narrowing. But the list of new highs is slowly growing. 

While it’s nowhere near where it needs to be to give us a bullish signal on the overall market, it is giving us a growing number of opportunities in individual names.

Let’s talk about some charts that we like buying (or preparing to buy) from our Inside Scoop universe right now.

From the desk of Willie Delwiche.

Over the past year, this old Wall Street saying has been more than an adage. It’s been a reality. Correlations across the ETFs that we use as proxies for various asset classes are overwhelmingly positive and on the rise. The exception has been Commodities (DBC), though many asset allocation conversations don’t even include commodities.   

Why It Matters: Elevated correlations have left investors with no places to hide as stocks enduring historic levels of volatility and weakness. 2022 has been a risk off environment where risk off assets have been as weak as risk on assets. Trying to navigate this backdrop has led to frayed nerves and impatience for the arrival of better times. Unfortunately this year has done little to show it deserves the benefit of the doubt so far.   

In taking a Deeper Look we put 2022 into context, review our indicators of risk behavior and highlight some areas where risk appetite may be improving.

We've adjusted a position in the Paid-to-Play portfolio today:

The Dow Jones Industrial Average is working on its 3rd straight week of gains.

In case you missed it, you have to see the look on Maria Bartiromo's face after I told her Friday that we're 4 months into a new bull market.

Priceless.

I think she was into it though. Check out the full clip on Fox Business here: Mornings with Maria

This weekend I published a note about how underrated I find the Dow Jones...

You hear it every day.

Are you bullish or bearish?

Like, what does that question even mean?

Which asset class are we talking about?

What time frame?

What sector?

It's a question that only journalists should ask. People with skin in the game understand that strong opinions will always be weakly held when money is on the line.

Our opinion never matters. What does matter is how we adapt our approach as new evidence comes in that either corroborates or contradicts our initial thesis.

From the Desk of Kimmy Sokoloff

That was a huge move overnight in the futures market. We're currently trading above gap-fill on the SPX at 3,739.

Now, let's see if we back and fill some.

The largest insider transaction on today’s Hot List is a Form 4 filing by Nimish P. Shah.

Shah reported an additional purchase of Tricida $TCDA stock worth roughly $2 million.

We retired our "Five Bull Market Barometers" in 2020 to make room for a new weekly post that's focused on the three most important charts for the week ahead.

This is that post, so let's jump into this week's edition.

The stock that has made its way to the ToW post this time around is from Bank Nifty. Slowly but surely, more and more constituents are moving higher and breaking out of big bases. Let's take a look at one such name.

From the Desk of Steve Strazza @Sstrazza.

Welcome to Under the Hood, where we'll cover all the action for the week ending October 14, 2022. This report is published bi-weekly and rotated with The Minor Leaguers.

What we do here is analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.

We use a variety of sources to generate the list of most popular names.

There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: a list of stocks that are seeing an unusual increase in investor interest.

Click here for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or...

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @AlfCharts

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...