From the desk of Willie Delwiche.

The yield curve is getting a lot of attention right now, and deservedly so. An inversion in the spread between the 10-year and 3-month Treasury yields has an unblemished record in anticipating recessions. But beyond that suite of indicators, there is actually evidence that macro conditions have stopped deteriorating.      

Why It Matters: Despite a recent lull in day-to-day price swings, 2022 has been one of the most volatile and weakest years for stocks in the past half century. Whether those trends persist into year-end or strong post-midterm election seasonal tendencies have investors feeling less bruised and battered by year-end likely depends on macro conditions. This is not a question of whether conditions are good or bad, but whether they are getting better or worse. Since last month our Macro Health Status report has actually improved. More favorable corporate bond yield momentum and stability in the earnings momentum trend have helped offset the yield...

We had a resting GTC order filled in the Paid-to-Play portfolio today:

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

Back in June, we published a report assessing the asymmetric opportunity to dollar-cost average into Bitcoin.

We concluded that mass liquidations driving Bitcoin back to levels last seen in 2017 represented a favorable opportunity for crypto investors to begin scaling into long-term spot positions.

In the almost exactly five months since then, Bitcoin has continued to creep lower, nearing 15,000. This price action validates the DCA strategy, and it looks even more favorable for long-term crypto investors.

Let's revisit the underpinnings of the strategy in light of recent history.

This doesn't have to be complicated.

Is the list of stocks and sectors in uptrends getting longer or is it getting shorter?

Are we seeing more stocks breaking down to new lows, or fewer?

If you can count, then you know the answer.

The question is, are you even willing to count?

The largest insider transaction on today’s list is a $17.9 million purchase by Patrick G. Ryan, the CEO of Ryan Specialty Group Holdings $RYAN.

Ryan is a titan of the insurance industry, as he formerly founded and served as chairman and CEO of Aon Insurance $AON for over 40 years.

From the Desk of Kimmy Sokoloff

To me, this market is coiling for the next big move.

As I've mentioned, if we continue to hold $SPX 3,934, there's potential up to SPX 4,020. Until then, this market is very choppy.

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.

This week we're looking at the outperforming PSU Bank stock.

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

We discussed:

• The most Bullish Time of the Year
• The most Bullish Time of the 4-year Presidential Cycle
• US Dollar vs Stocks Negative Correlation Continues
• Mexican Peso & VIX Relationship
• Euro & British Pound at Key Resistance Levels
• Stocks rallying with stronger GBP
• Fewer stocks making new lows, but waiting for expansion in new highs
• Sentiment for risk assets remains pessimistic
• What Year 3 in Bull Markets Looks Like
• Risk Management Charts: NYSE Comp & Value Line Index
• Relative Strength in SMIDs
• Energy - Still Waiting For A Breakout
• List of Strongest Energy Stocks to Buy
• What the end of the Energy run looks like - Crude Oil Key Levels
• Healthcare Stocks Continue to Lead - Which Ones to Own Now
• Insurance Stocks Lead Financials Higher - List of Buys
• Broker Dealers showing Relative Strength
• Most Important Chart on Earth: XLF & ITB
• CAT & DE are not defensive trades
...

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...

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...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we're currently seeing in asset classes around the world.

Energy and Crude Diverge

Crude oil (CL_F) and energy stocks have been trending in different directions since this summer, but the gap between the two has become more pronounced during the trailing month. We’ve included the 100-day rolling correlation, illustrating how rare such a prolonged dislocation is. With the Energy sector XLE failing to hold above its June highs this week, this divergence becomes a more-concerning datapoint for energy bulls.

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

• This week, our macro universe was negative, with 79% of our list closed lower with a median return of -0.54%.
• The Volatility Index $VIX was the winner, closing with a 2.66% gain.
• The biggest loser was Oil $CL, with a weekly loss of -9.98%.
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 2%.
• 15% of our macro list made fresh 4-week highs.
• Meanwhile...

From the Desk of Kimmy Sokoloff

That was a very choppy day. And it could potentially be like this all week.

We have multiple Fed speakers this week, with FOMC minutes on Wednesday at 2:00 p.m. ET.

Just when 2022 was getting known for noise, the markets quieted down last week. For the first time in five weeks, the S&P 500 did not move 3% in one direction or the other. For the first time this year, no trading day last week saw the S&P 500 move 1% or more in either direction. We begin a new week with the S&P 500 not having moved 1% or more in either direction in six straight days. It has been a year since it has had a longer streak of small swings.

More Context: In the past half century, the only years with more 1% daily moves than 2022 were 2008 and 2002. Before this recent run of quiet, the S&P 500 had moved by 1% on more than half of the trading days. Historically there is an inverse relationship between volatility and strength. In the past half century, no year had fewer 1% moves than did 2017 (which had fewer for the entire year than 2022 is averaging per month). When daily volatility subsides, prices typically rise. That was the case in 2016-17, mid-2018, late-2019, and (to a lesser...

While bargain clothes shoppers seem to be driving profits in a way Wall Street likes, it takes a certain kind of trader to buy stock in the company when it's making new All-Time Highs.

Well, I just happen to be that type of trader! In fact, one of my favorite setups is to buy stocks making fresh all-time highs. There is no overhead supply of bagholders looking to dump the stock to get back to even. Nothing but blue skies ahead.

And when options premium has collapsed, we can buy long calls to put ourselves in a position to enjoy the possibility of unlimited gains.

Let's go shopping!

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

We had a resting GTC order filled in the Paid-to-Play portfolio today:

Tomorrow, I'm off for a roadie to Wellington to catch up with some buddies and to go to a lecture. It all should be a great time.

Last week, I spent some time at my Mum's lifestyle block, house-sitting and looking after their animals.

It's moments like these where you can unwind and clear your head. This is especially important when you're involved in these markets.

Random internet tokens?

Rug-pulls?

Mass liquidations?

It all seems false when you step outside and unwind.

In this market, I've spent less time looking at charts and more time thinking and contemplating. Don't force your hand in environments like these.

If you try to find setups instead of seeing them, you'll enter into trades you'll inevitably regret.

The largest insider transaction on today’s list is a Form 4 filing by Mark and Edward Shoen’s Willow Grove Holdings LP.

The holding company revealed a purchase worth $32.4 million in AMERCO $UHAL. The Shoen family remains the largest holders of UHAL stock.