From the Desk of Steve Strazza @Sstrazza

Welcome to The Minor Leaguers.

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.

Nowadays, 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 new...

I've learned a lot of lessons over many years in the market and I've got war stories for days. 

But with what we do today, I just like to cut right to the chase. I'm going to share my worst defeats and hardest lessons so you can learn from them, just like I did, and hopefully sooner., 

We all have to learn one way or another. 

Today we're talking about the most important companies in America. But what exactly does that mean? Most important? 

It's so open ended and subjective. 

When I was a lot younger, call it 15-18 years ago, I hadn't learned to recognize the sum of the parts of the market. It hadn't hit me yet that it's a market of stocks. It's not just a "stock market". 

This really set me back at the time. I was being too narrow minded and focused on what the media was pointing me to. I wasn't running those numbers myself deciding what actually mattered and what was just noise. 

And when I finally understood that it takes stocks going up in prices to drive the indexes higher, I started to pay more attention to the prices of those stocks. 

But which stocks do we focus more of our...

It's been a historic bull market for stocks - One of the best periods to own equities in American history. I hope you participated along with us.

But believe it or not, the U.S. was not the biggest winner. There are other parts of the world that have actually outperformed U.S. equities - both the S&P500 and the Nasdaq100 returns. 

Look at the Tel Aviv 125 Index, for example, breaking out of this multi-year base to new all-time highs:

You may have heard by now. The so called, "Buffett Indicator" is flashing what we're being told are "warning signals" of an imminent market collapse.

It is the "Buffett Indicator" after all. And Warren Buffett is one of the all-time greats.

But let me fill you in on a little secret. The only people who actually care about this ridiculous excuse for a "market gauge" are journalists writing their glorified gossip columns and charlatans trying to do their best to scare you. 

That's it.

They claim that the "Buffett Indicator" is this magical signal based on a ratio between the total market-cap of U.S. stocks relative to U.S. GDP. 

It's so hilarious that even Charlie Munger came out and said that, "Just because Warren thought of something 20 years ago doesn't make it a law of nature. There is no natural correlation between GDP & Corporate Profits"
 

The "Buffett Indicator" is not a thing. Not even the guy who it's named after thinks it's relevant. 

Meanwhile, here's a chart of Berkshire Hathaway chugging along in a strong uptrend making higher highs and...

Prospect Capital Corporation $PSEC CEO John F. Barry III made another splash, this time with a massive $8.58 million buy. He reported this 2,000,000 share purchase in a Form 4 filing on Friday.

When the top exec puts this kind of skin in the game, it’s time to sit up and pay attention.

Here’s The Hot Corner, with data from December 27, 2024:

And that’s not all! Hedge fund heavyweight EcoR1 Capital LLC is doubling down on biotech.

The firm added $1.8 million worth of Zymeworks Inc $ZYME to its portfolio, upping its stake to 21.5%. ZYME is now EcoR1’s fifth-largest holding.

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

Higher highs and higher lows are what make an uptrend. When that stops being the case, it's time to reassess.

Let's step back and take a look at the Dow Jones Industrial Average. The diverse mega-cap index makes a great benchmark for the broader market.

Right now, the Dow is sitting at a critical Fibonacci extension level, around 42,000. That also lines up with the July highs, adding more weight to this key area.

If the Dow stays above 42,000, the uptrend is alive and well and there's nothing to be overly concerned about.

But if it slips below that level, things could get messy and it'll be time to prioritize strategies that thrive in that kind of environment.

This would also send the Dow toward a lower low on short-term timeframes, calling the ...

Crude oil is setting up for a big move, and almost nobody is paying attention. In fact, sentiment in the energy trade couldn’t be more bearish right now. Everyone hates it, everyone. 

As Strazza said on our call yesterday, “Even Warren Buffett is losing money on this one.” That’s the vibe.

XLE keeps dropping, the bearish sentiment intensifies, yet producers are stepping in and buying. That’s a bullish signal if I’ve ever seen one.

There are plenty of reasons to start liking energy here, especially when headlines like these are flying under the radar of most U.S. investors. 

Sure, this crisis might trigger a short term pop, but I’m not in it for a flash move, I’m looking for a trend. 

And the pieces for a sustainable breakout are falling into place.

Let’s talk about seasonality. Most people think energy’s best season is summer. Makes sense, right? But the data tells a different story. Energy peaks in the summer, then drifts into bearish seasonals, until now.

The sweet spot for energy? It’s right...

Here's the replay and chartbook from the December 27 Weekly Strategy Session. We made this week's video a recording rather than a live session due to holiday travel. I expect to be back to the regular schedule next week. 

Be sure to join us Thursday at 11 am ET and maximize your return potential.

Below is the 11th ASC Mastermind  Course. In this video, I dive into the world of mega-caps.

Mega-cap stocks are, by definition, the best stocks. You can't have a stock be worth hundreds of billions of dollars without it going up a lot. 

And yet, this does not mean that all mega-cap stocks go up consistently, or that once a stock reaches mega-cap status it stays there. 

We know this is not true. So we use our technical analysis framework to identify the best ones. This video will show you how we do it. 

Enjoy.

During this time of the year, I find myself thinking back on the prior 12 months. It's hard not to right?

I wanted to send a short note today reminding everyone to look around. Understand what is happening out there and why it's been happening. 

This year more than ever, we are grateful for the permabears, who are so darn good at convincing all those gullible sheep to fight a perfectly good bull market, that it's helped the rest of us make so much more money.

The S&P500 is up 28% this year. The Nasdaq100 is up 30%. This is after the 2023 returns of 26% for the S&P500 and 54% for the Nasdaq100. 

They cried and cried about a recession. But all we got was the Nasdaq literally doubling in total value.

These are historic returns that have rarely ever been seen in American history. 

But I have to say, if it wasn't for these angry permabears promising you a crisis every day the past 2+ years, our returns would not have been as good.

If Wall Street sell side analysts weren't so bad at their jobs, these gains would likely not be anywhere near what they've been.

If economists didn't put on blindfolds when walking into...

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

Welcome to the Hot Corner Insider Weekly Report!

As you know, we spend a lot of time tracking insider activity to come up with this universe.

But that’s only half the battle!

Once we identify the names insiders are targeting, we overlay our expert technical analysis to see if the market agrees with their actions.

While we track some of the most powerful and well-informed market participants… we aren’t just going to follow them blindly into their trades.

We want to see that the insider activity is confirmed by the trend before we get involved. 

When we can check both of these boxes, we identify asymmetric risk/reward setups, and then jump in and ride these trends higher alongside the smart money.

Let’...

Last month the S&P500 and Nasdaq100 both closed at the highest levels in history. December is now on pace for another new all-time monthly closing high, for the 10th time this cycle.

The trend here for stocks is NOT down.

This is a bull market. And sector rotation continues to drive it higher.

We discussed this all and what we're looking for come the new year during our LIVE Video Conference Call this week. 

I really encourage you to give this video a watch to prepare you for what 2025 will bring. You'll...

From the Desk of Steve Strazza @Sstrazza

Welcome to The Junior International Hall of Famers.

With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US-listed international stocks, or ADRs.

This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.

Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

Let’s dive right in and check out what these future big boys are up to.

This is our Junior International Hall of Famers list:

Click table to enlarge view

And here’s how we arrived at it…

We removed laggards which are down 5% or more relative to the ACWI Ex. U.S. Index $ACWX over the trailing...

If the bull market is going to resume higher, we think the semiconductors will lead the way. 

We positioned in a bellwether last week. Today, we're going to get into a name that'll give us a little more juice if we're right.

In today’s Daily Digest, we’ll review the following:

1. No new positions today.
2. Rolled IGV to Feb7 (weekly) options.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Today’s standout insider activity comes with plenty to unpack.

Warren Buffett’s Berkshire Hathaway is back at it, revealing a fresh $28.5 million purchase in VeriSign $VRSN.

When Uncle Warren makes a move, it’s always worth watching.

Over at Progyny $PGNY, both the CEO and the Executive Chairman stepped in to buy their own stock.

Seeing top leadership align like this is a rare and notable signal.

Here’s The Hot Corner, with data from December 26, 2024:

Meanwhile, Third Point disclosed a 13G filing for Telephone and Data Systems $TDS, revealing an original stake of 5.70%.

Finally, executives from several other companies also made significant purchases:

• Agree Realty Corporation $ADC;
• ...

From the desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Moderna, Square, and Snap.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

*Click table to enlarge view

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month.

Then, we...

As the year comes to a close, the relative strength in space and exploration stocks is absolutely off the charts.

Steve did a great job covering them last month—make sure to check it out if you haven't already.

These stocks have been on my watchlist for weeks, and I think their time has come to continue their upward path.

Let me walk you through my two top picks that are offering an astronomical risk versus reward opportunity at current levels.

First up, we have Rocket Lab $RKLB:

After a near-vertical rally off its summer lows, RKLB has been consolidating its gains above a major polarity level, in the form of a flag pattern.

These formations tend to resolve in the direction of the underlying trend and I don't think this time will be any different.

In today’s Daily Digest, we’ll review the following:

1. No new positions today.
2. Rolled IWM to February options.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!