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 the Hall of Famers, the 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.

Jim DeFranco, the executive vice-president of Dish Network $DISH, is on our list again today with his fifth Form 4 filing in August alone.

DeFranco, who co-founded the broadcasting company over 40 years ago, disclosed a purchase of $2.5 million in his latest filing.

The average stock on the Nasdaq bounced over 40% off it's lows this summer.

That's a serious squeeze.

But let's remember that a lot of that stuff is junky and had gotten crushed, so of course they'll have strong bounces.

Over on the NYSE, the average bounce has been less pronounced but still got into the high 20s in percentage terms.

So today let's take a look at how each of the S&P Sectors have performed since the list of NYSE new lows peaked 2 months ago:

We debuted a new scan recently which goes by the name- All Star Momentum.

All Star Momentum is a brand new scan that guides us towards the very best stocks in the market. We have incorporated our stock universe of Nifty 500 as the base this time around. Among the 500 stocks that we follow, this scan will pump out names that are most likely to outperform the market.

From the Desk of Steve Strazza @Sstrazza

The bulls have moved back into the driver seat over the past few months, as a good deal of technical damage was repaired during the summer rally.

It appears that the weakest stocks have at least stopped falling as growth indexes have transitioned to more constructive, base-building action since late Q2. 

And, more recently, the strongest sectors during the current cycle have reclaimed key levels. 

We’re talking about materials rallying back into their old range and energy stocks resolving above a shelf of former highs. 

As both cyclical sectors are now back above our risk levels, we are looking for the strongest stocks to buy to express a bullish thesis on these groups.

When we think about the strongest stocks within materials, the coal industry and its recent resilience is top of mind.

We see no reason why the relative strength from these stocks shouldn’t continue, so let’s dive in and outline some of our favorite charts in the space.

Before we do that, here’s our equal-weight custom index, which includes the largest coal stocks listed on US exchanges:

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This is the video recording of our August 24, 2022, Inside Scoop Weekly Strategy Session.

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:

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 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...