Reversal - Or Just a Respite?

The new low list peaked in May and the new high list bottomed in July. Despite this, we’ve had more new lows than new highs in 44 of the past 46 weeks.

The Details: More than 4400 stocks (48% of the total on the NYSE + NASDAQ) made new lows in May. That was the most since March 2020. The new low list has ebbed and flowed since then but has not surpassed that peak. The 116 stocks (just 1% of NYSE + NASDAQ total) that made new highs in the first week of July was the fewest since April 2020. Last week 357 stocks (4%) made new highs and 1645 (18%) made new lows.

More Context: When downtrends ready to turn higher and new bull markets are being born, we usually see a sharp collapse in new lows accompanied by a gradual expansion in new highs. The combined effect is that new highs begin to consistently outnumber new lows. We saw this in early 2019 and again after the COVID lows. There were two weeks in August in which the new high list was longer than the...

From the Desk of Kimmy Sokoloff

We opened up on the indices, and they came back down to fill their respective gaps.

We trended higher the rest of the day, but it was a pretty volatile morning.

I dunno why, but thinking about train tracks and rail stocks got me thinking of Blue Steel. There is absolutely no connection between today's trade and the pose made famous by the Zoolander film. But, you're welcome.

Today's trade idea comes straight from All Star Charts' recent Mid-Month Conference Call.

While not aggressively bullish here, I do think there is an opportunity to leverage high options premiums into a high-probability bet.

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

Where is the defensive rotation?

I was told US Stocks were in a bear market.

For those keeping score at home, the NYSE new lows list peaked in June. That was over 4 months ago.

But Consumer Staples have been underperforming since May!

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

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

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

Nothing's changed.

That's it -- that's the post. There's nothing to discuss.

Bitcoin and the rest of the asset class are still a choppy mess. There's no conviction in taking longs until price action can shape up in a more bullish manner.

Given the lackluster market conditions, this letter will act as yet another brief interim update.

From the Desk of Kimmy Sokoloff

The SPX futures popped above 3,800 last night and then retreated.

Now we seem to be climbing back to that area. This 3,800 area will have some resistance, then 3,827.

It’s a new week, but the same insiders are still buying.

Form 4 filings for the wood pellet producer Enviva $EVA have been hitting the wire nonstop this month.

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.

The Outperformers.

The Outperformers is our custom-made scan that pinpoints the very best stocks in the market. It’s the fastest, easiest way to find quality names that are primed for significant moves.

The goal is that as the market rally progresses, the sector rotation within the market will reflect in this scan. So while our Top/Down Analysis helps us with the broader view of the market, this Bottom/Up scan makes sure that we catch the slightest change in sentiment.

Why are you an investor?

Have you asked yourself that recently?

Why do you take time out of your life to enter into the arena that we call markets?

Are you here to make money?

Or would you rather gossip about fed??

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.

I'm old enough to remember when stocks would go up for multiple weeks at a time.

They used to call those uptrends where I'm from.

So how about a 3rd straight week of gains for the Dow Jones Industrial Average?

That's something you don't see every day:

Wednesday night we held our October Mid-Month Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each

Let’s get right into it!

From the Desk of Ian Culley @IanCulley

It’s easy to lose sight of how impressive energy has been this year. 

We get it. Sideways action is boring.

But while the rest of the market has been selling off, energy has shown incredible resilience, digesting gains in a continuation pattern since early summer.

After an explosive rally for energy stocks off the 2020 lows, it’s normal to experience an extended period of corrective action. In fact, it’s healthy. 

Now get this...

Many of these stocks haven’t even broken out yet!

We know it sounds crazy, especially when some of these industry groups have more than tripled during the trailing 24 months.

But the charts don’t lie. They’re telling us some of these trends might just be getting started. Let’s take a look.

We can break down oil and gas companies into three main categories: upstream, midstream, and downstream. 

These designations refer to where a particular company operates along the supply chain, from extracting the raw material to selling the refined...

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

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 Airbnb, Uber, and Paypal.

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 which you can check out here.

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...

From the Desk of Kimmy Sokoloff

Stick save, as they like to say, "and a beauty," as J.C. would add.

The market held where needed.

From the Desk of Willie Delwiche.

2022 Sovereign Stress > 2008 Corporate Stress

The Chart: 

The long-term Treasury Bond ETF (TLT) is currently in a drawdown of more than 40%. This exceeds the 35% drawdown that high yield bonds (HYG) experienced in 2008 during the financial crisis.

Why It Matters: 

High yield bond yields are rising but spreads are not widening. That’s because sovereign yields are rising just as fast. That is a big difference between 2022 and 2008. It’s not just peripheral countries. We are seeing stress in the UK and we are seeing stress in Japan. We are also seeing it in the US, where yields are rising at their fastest pace in 40 years, yield curves are inverting and some Treasuries are trading at 50 cents on the dollar. It’s a risk off environment, but one in which risk off assets are leading the way lower.