We've seen some bullish thrusts in sectors with ties to the medical and healthcare spaces, and if the broader market has designs on moving higher deeper into the summer, we think leaders will continue to emerge from this area.

Today's trade is a bet on one of those next leaders.

This is the video recording of our July 8, 2022, All Star Charts Crypto Weekly Strategy Session.

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

There’s been a lot of buzz about the dwindling likelihood of a Twitter $TWTR-Elon Musk tie-up this week.

As Musk’s team has reportedly cut off deal discussions around funding, the talking heads are telling us what price has been suggesting for months now: It’s not happening.

We're going on 32 consecutive weeks of more stocks making new lows than new highs.

In bull markets you see the opposite.

Gold has not been in an uptrend in almost 2 years. I think one day it eventually breaks out. But what's the rush?

Let it break out!

I discussed all of this and more with Charles Payne on Fox Business yesterday.

Here's the full clip:

This is the video recording of the July 7th Weekly Town Hall w/ Willie Delwiche.

07/07/22 2:00 PM ET

From the desk of Willie Delwiche.

This All Star Charts +Plus Monthly Playbook breaks down the investment universe into a series of largely binary decisions and tactical calls. Paired with our Weight of the Evidence Dashboard and our Playbook Chartbook, this piece is designed to help active asset allocators follow trends, pursue opportunities, and manage risk.

In Focus for July: We move into the third quarter, with many hoping for a respite from the environment that produced the worst first half of a year for balanced portfolios since the 1930’s. With 1% daily swings in the S&P 500 running at twice their historical rate (to the point that they have been the norm rather than the exception this year), leaning on price movements alone as evidence of improvement may be trickier than normal. The absence of an underlying breadth thrust regime has weighed heavily on equities. In the absence of such a signal, we want to see a combination of better breadth, liquidity and macro sentiment before thinking less...

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

We were just talking about how we liked the strength from Baker Bros. Advisors’ largest holding, Seagen $SGEN, during yesterday’s weekly in-house analysts’ call.

This morning, the Wall Street Journal reported that Merck & Co. $MRK is in advanced discussions to acquire the cancer biotech for $40 billion.

From the desk of Ian Culley @IanCulley

The US dollar has answered any and all questions about its strength over the past few months.

During Tuesday's session, there was no place to hide, as King Dollar continued the Fourth of July celebrations, putting on its own fireworks display. 

It lit up every currency on the board as major forex pairs continue to go down in flames. 

Two that stood out were the EUR/USD and the GBP/USD.

Yes, these crosses have been trending lower since the beginning of the year. But with the critical levels that broke yesterday, we're anticipating fresh downside legs and prolonged dollar dominance.

Let’s take a look.

Here’s a chart of the EUR/USD:

On Tuesday, the euro decisively broke down to its lowest level in almost two decades. 

Given its majority composition of the...

From the desk of Steve Strazza @Sstrazza

Energy has been the clear leader in 2022. The sector posted a record-setting start to the year, even as the broader market sold off. 

Whether it's our Inside Scoop universe or any other scan, we’ve gotten used to leaning on the strongest stocks in the oil field for long exposure.

As participation narrowed for US stocks throughout the second quarter, we cautioned that energy had become an easy target and was vulnerable to catching lower with the broader market.

About a month ago, that happened as bears finally came for energy. In a matter of weeks, much of this year’s progress came undone, and so did a handful of our stops.

While there has certainly been short-term technical damage, the primary trends are intact. And while these stocks have been hit hard over the trailing month, there's little evidence that they're done being leaders over longer time frames.

Once this corrective action passes, we expect energy stocks to resume higher and offer plenty of bullish opportunities. But in the meantime, they are susceptible to deeper drawdowns and increased selling pressure.

...

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

As many of you know, something we've been working on internally is using various bottom-up tools and scans to complement our top-down approach. It's really been working for us!

One way we're doing this is by identifying 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...

From the desk of Willie Delwiche.

A new quarter brings new positioning for our strategic portfolio, tilting away from equities, taking a fresh look at bonds and trimming up our commodity exposure. Recent strength in bonds has adjusting our fixed income exposure in the cyclical and yield portfolios and adding it to the tactical portfolio. While comfortable limiting our risk exposure for now, we also want to lean toward where the evidence suggests the market is heading.

From the desk of Willie Delwiche.

Key Takeaway: Flow data showing equities attracting 71 cents of every ETF dollar in the first half of 2022 casts some doubt on claims that sentiment is washed out even as bears continue to outnumber bulls. New lows > new highs and excessive pessimism are features of bear markets, while new highs > new lows and building optimism tend to be seen in bull markets. The wall of worry seen in the AAII sentiment data off of the COVID lows is more an exception than it is a rule, especially in the absence of breadth thrusts or other evidence of strong participation. Between the ETF flow data and measures of household asset allocations, the risk is that the investor love affair with equities grows cold and they seek solace elsewhere. Overall the sentiment data now looks more similar to what was seen in Q1 2008 than what was seen at the lows a year later.

Sentiment Report Chart of the Week: Equities Feel The Flow

Discussions of sentiment often focus only on what investors say...

This is the video recording of our July 6, 2022, Inside Scoop Weekly Strategy Session.

From the desk of Willie Delwiche.

On both an absolute and a relative basis, healthcare names continue to perform. I guess the need for quality healthcare is a stronger driver of stock prices than interest rates and global macro? At least for now, that appears to be the case.

One name we've been watching, Cigna $CI, is knocking on the door of a major base breakout.

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