Expert technical analysis of financial markets by JC Parets
It’s the weekly bond edition of What the FICC?
The relative strength of Emerging Market bonds shores up the ongoing bottoming process for risk assets.
Check it out!
From the Desk of Ian Culley
It’s impossible to ignore – investors are reaching for risk.
Biotech stocks are catching higher. Copper futures are working on their tenth up-day in a row. Even the Emerging Market HY Bond ETF $EMHY is breaking to 7-month highs as it completes a multi-month base.
And don’t forget about Silver! Gold’s crazy cousin has proven by far the best-performing asset since the US dollar peaked last fall. Strength among these market areas indicates a healthy risk appetite.
I can’t overlook these signs of a constructive bottoming process, especially considering the next chart…
I got a lot of feedback on my last letter where I suggested active traders need to stop trading Covered Call spreads for tactical trades and instead do a simple Naked Puts trade.
Thank you to everyone who engaged.
Anyway, here’s one question [edited to the important parts] I got from a reader where I thought my answer might be instructive to more of you:
Hi Sean,
I read your information on naked puts. When I intend to buy a stock, I would like to sell a put. I just don’t know how to go about it. I just don’t know where the strike price would be. I understand that I would have to buy the stock at that price (whether it is better or worse than hoped).
If you could give me an example that would help.
Cheers!
This is a great question, but one without a clear-cut answer. Here was my response: [Read more…]
Forget cryptocurrencies. Look at these crypto stocks!
Seriously, some of these moves have been nuts.
We took a small long in MicroStrategy $MSTR at the lows, and it hit our 50%-plus target in just two weeks.
Crazy…
If cryptocurrencies are going to start trending higher — which is our bet — these stocks face serious resistance.
But let’s approach this with a level head.
It’s the weekly currency edition of What the FICC?
The US dollar index $DXY registered a “death cross” last week, confirming a bearish trend reversal.
But it’s not the confirmation of the dollar downtrend that has my attention. It’s what the signal suggests for stocks in the coming months and quarters.
Check it out!
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 their journey to becoming the market behemoths they are today.
When you look at the stocks in our table, you’ll notice we’re only focused on Technology and Growth industry groups such as Software, Semiconductors, Online Retail, Solar, etc.
Then, like any good technician, we filter the list down to those closest to new highs.
This allows the cream of these strong groups to rise to the top and helps streamline our mission to identify technical breakouts in the top-performing stocks.
