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

The largest insider transaction on today's list is a Form 4 filing by H Partners Management, which reported an $11.6 million purchase in the theme park Six Flags $SIX.

The hedge fund has a total stake of 11.50% as well as a seat on the board.

Gas prices are going up?

Good.

That means our Energy stocks are probably doing well.

You see, we don't have any control over the cost of Energy. I don't work for the government. I'm not in the Energy business.

I don't know the first thing about drilling for Oil or Gas.

I'm just a random dude with a computer and some smart drinking buddies.

So for me, I have 2 choices:

From the Desk of Ian Culley @IanCulley

The US dollar Index $DXY is trading at fresh highs. Take a look around the currency market. It shows.

Recent attempts to fade dollar strength have failed. The euro has fallen to its lowest level since late 2002. And we’re beginning to see forex pairs experience fresh breakouts in favor of the USD.

It’s certainly not the best look for risk assets. But it’s offering us great trading opportunities, not to mention some very valuable information.

A couple of pairs that are providing both are the USD/CNH and the USD/CNY. Let’s take a look!

From the desk of Willie Delwiche.

Key Takeaways:

• Risk On appetite missing from recent rally
• Bond yield momentum waning as financial stress remains low
• Intact dollar uptrend and rollover in copper/gold ratio are equity market obstacles

In the wake of the breadth and momentum thrusts seen over the first half of August, the market seems to be arguing that the path of least resistance is higher as we move into 2023. The macro backdrop almost guarantees that the way forward will be strewn with rocks and roots. The question is whether the obstacles will be significant enough to derail or delay the journey. We will look at several macro-related indicators that could help us anticipate a more or less treacherous road ahead.

Before we get to that, even in the wake of the recent thrusts there is room for further improvement from a market perspective. The turn higher in new highs versus new lows remains tenuous and a robust appetite for risk has been elusive. This Risk Off - Risk On Range-O-Meter compares where the ratios between the...

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 making its way to today's post is part of the Capital Goods sector that has been performing well for a while now.

And guess what? We have a breakout! Do you know which stock we're talking about?

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

It's impossible to ignore legacy markets when evaluating cryptocurrencies.

The two are so intertwined that correlation analysis almost trumps our traditional price analysis.

I hate to say it, but if you want to understand where Bitcoin's going, study the S&P 500 and the US dollar, not the Bitcoin chart.

The largest insider splash on today’s list is a Form 4 filing by Gregory Bailey, an independent director at Biohaven Pharmaceutical $BHVN.

Bailey reported the purchase of approximately $5.6 million in his company’s stock.

From the Desk of Steve Strazza @sstrazza

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 the stock is about to move in...

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 19, 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.

Watch this video for a behind-the-scenes look at our process.

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

Key Takeaway:

• Rally has not produced risk on leadership.
• Lack of stress keeps upward pressure on rates.
• Macro concerns testing resiliency of market bulls.

There has already been a steady increase in expectations of a 75 basis point rate hike when the FOMC meets in September. More importantly, expectations that the Fed will cut rates soon after the tightening cycle is complete have faded. This is leading to renewed upward pressure on bond yields (which have been experiencing their most sustained uptrend in the past 40 years). In periods of elevated inflation, stocks and bonds tend to become positively correlated. That has been on full display this year, as balanced portfolios have been mired in a more persistent downtrend than any other experienced in the past decade.

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 as 85% of our list closed lower with a median return of -1.46%.
• The Volatility Index $VIX was the winner, closing with a 5.48% gain.
• The biggest loser was Lumber $LB, with a weekly loss of -11.67%.
• There was a 2% gain in the percentage of assets on our list within 5% of their 52-week highs – currently at 11%.
• 13% of our macro list made fresh 4-week highs, and 6% of our...

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.

New Leaders Meet Resistance

Another group that has enjoyed the recent rally has been biotech. Biotechs have been among the strongest groups since stocks rebounded off their summer lows. 

As you can see in the chart, IBB is now running into a significant resistance level as prices pull back at their year-to-date pivot highs. This 133 area also coincides with key prior-cycle highs from 2015. With so much price memory here, this is a logical level for some corrective action, and that’s exactly what’s taken place since last week. We’re seeing similar price behavior in other sectors and indexes. For the most part, it is constructive as stocks have earned a breather following the rally over the past few months.

Today's trade comes from the latest Young Aristocrats report. And today's dip offers us a chance to get into this trade with a very nearby risk management level (today's low). Either this stock is going to make a run or it's going to fail, and we'll likely find out quickly.

As such, we're taking a long position in October call options.

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

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

Late last week, we argued that short-term caution was warranted.

With equities pressing against key supply zones and the dollar beginning to reassert strength, we made the case for patience.

And, over the weekend, we've seen risk-off action persist.

The largest insider buy on today's list is a Form 4 filing by Bill Gates, who revealed an additional purchase in Ecolab $ECL worth $19 million.

This is the third Form 4 filed by Gates in the last five days, as he continues to add to his position.