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...

The largest insider transaction on today’s list comes in a Form 4 filed by HF Direct Investments Pool, LLC.

The investment unit of the direct response marketing firm reported a purchase of $50 million in Westrock Coffee Company $WEST, increasing its ownership stake to 17.15%.

From the Desk of Kimmy Sokoloff

The indices had a dead-cat bounce yesterday afternoon, then rolled back over.

We have CPI data for July coming out at 8:30 a.m. ET.

I'll wait till after the print to see how things look. 

From the Desk of Ian Culley @IanCulley

The US Dollar Index $DXY is the most important chart in the world, again.

But, honestly, when is it not?

There’s no hiding from King Dollar.

It’s true: Currencies are not considered one of the three major asset classes (bonds, stocks, and commodities).

Nevertheless, fluctuations in the US dollar impact every asset worldwide – especially stocks and commodities. 

And the probability of renewed headwinds for risk assets is increasing as the failed breakdown in the dollar could have legs…

Check out the triple-pane chart of the DXY, our G-10 currency index, and the US dollar advance-decline line:

Our US dollar A-D line went from failing to confirm the DXY breakdown last month to posting new multi-year highs this week.

To be clear, the...

From the Desk of Kimmy Sokoloff

This morning I mentioned in the Live Trading Room that if we fill the gap on $QQQ down to 368.63 we can potentially have a bounce trade.

That's what happened, and $SPY bounced as well.

I alerted the room at 12:35 p.m. ET that both indices can rally at least a point.

I was slow on entering short trades, as the market was moving slowly.

We've got CPI tomorrow morning.

Today on the Morning Show, JC was talking about bitcoin and how if you want to underperform the next leg higher in crypto, then own bitcoin. But if you really want to get some juice for the next crypto rally, the crypto mining stocks are how to participate!

In particular, both JC and Strazza like Riot Platforms $RIOT and Marathon Digital Holdings $MARA.

And specifically, we all like what could have been a recent "oops" or fakeout-breakdown that may have just shaken out all the weak hands, clearing a path for the next move to new cycle highs:

With $MARA flirting with breaking back above $16.00 per share today and implied volatility in the options near yearly lows, it feels like high time to catch the whipsaw back to highs.

Here's the Play:

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

The largest insider transaction on today’s list comes in a Form 4 filing from Steven J. McLaughlin of fintech-focused investment banking firm FT Partners.

McLaughlin revealed a purchase of $2.9 million in Expensify Inc $EXFY.

From the Desk of Kimmy Sokoloff

It's been slim pickings with regard to stocks to trade, as the indices are in a holding pattern.

I'm sure they'll pick a direction soon.

As we know, August is typically a bumpy month, as is September.

Over the past few weeks we've been positioning ourselves for a Regime Change.

It's not so much the end of the world that's coming, as it is just healthy, normal sector rotation.

See: If not Tech, then What?

The most important chart that helps to explain what's going on is the S&P500 and Nasdaq100.

This is what being stuck below overhead supply looks like:

From the Desk of Kimmy Sokoloff

It was a tough day today, with a lot of stop-outs.

The indices are still stuck under their respective resistance zones.

I did come out ahead today by a few points, but it was a struggle.

$LLY saved trading today.

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

Gilbert Gottfried would like this trade.

The famous duck on our television screens that interrupts nearly every commercial break during football season is setting us to pay us back for all those annoying "Aflac!" utterances.

New all-time highs + low volatility sets up my favorite trade.

The largest insider transaction on today’s list comes in a Form 4 filing from the CEO and chief business and strategic operations officer of Cerevel Therapeutics Holdings $CERE.

The two executives reported purchases for a combined amount of $2.5 million.

From the Desk of Kimmy Sokoloff

Moody’s hampered the mood of the market by downgrading a few of the banks' credit ratings.

Late in the day yesterday, $QQQ started to lift higher, but that's a no-go this morning.

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended August 4, 2023. 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...

From the Desk of Kimmy Sokoloff

We have a little bit of a give and take here.

The indices are below their respective resistance levels and, as of now, they're unable to get above them.