Expert technical analysis of financial markets by JC Parets
We like buying stocks that are breaking out of bases, regardless of what sector they’re a part of.
But when you combine a emerging leadership with these base breakouts, now you have a smokin’ combination!
That’s exactly what’s happening in the Pot space. Make sure to check out our latest on Marijuana Stocks here.
But today it’s the Cresco Labs that has my attention. [Read more…]
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
New Mystery Chart!
For those new to this exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe… on an absolute or relative basis.
Maybe it’s a custom index or price is inverted, who knows!
We do all this to put aside the biases we have associated with the asset in order to take a view based solely on price behavior.
You can guess what it is if you must, but the real value comes from sharing what you would do right now.
So let us know what it is… Buy, Sell, or Do Nothing?
From the desk of Steve Strazza @sstrazza
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
In last week’s report, we played “devil’s advocate” and laid out some of the more bearish developments we could find out there.
But all-in-all, the market is still providing bears less room to make a sound argument. We continue to find that any bearish evidence is primarily isolated to shorter timeframes… and even then, still overwhelmed by the abundance of bullish data points.
So while a minor rise in volatility can be expected in what tends to be a seasonally weak month of February, over a longer timeframe, we’re still aggressive buyers of stocks.
When we poured over our chartbooks this weekend, it became clear that there are eager hands for risk assets, as countless pullbacks were met with overwhelming demand.
Sentiment right now is also incredibly supportive of higher prices as investors are clearly still skeptical of this rally. This was illustrated well when the VIX was bid up to its highest level in history during just a 5% pullback at the end of last month.
This is all supportive of our case that a brand new bull market is just leaving the station.
Can you think of a more bullish combination than a bunch of angry people and indexes all over the world making new all time highs?
This is what’s going on right now. And I think it’s fantastic.
It’s been a quiet last few days here at Allstarcharts.com as I’ve been meeting with the team and working on some really exciting new projects. I got together with Willie, Strazza, Peter, Danny, Jean Carlo and Matt this week, and we got a lot more accomplished than I would have imagined.
Anyway, I didn’t completely fall off the grid, although I kind of tried to. Most of our conversations still revolved around the market, sentiment, breadth, rotation and the Intermarket relationships. I mean, even over dinner! We just couldn’t help ourselves.
I’m seeing stocks making new all-time highs, but the questions I get from journalists is how it’s possible?
How it’s possible? They’re in uptrends. There’s more demand for stocks than there is supply of them. That’s not my opinion. That’s just a fact. There may not be as much demand for stocks in your household, but that’s your problem. Not ours…. [Read more…]
From the desk of Steve Strazza @Sstrazza.
Welcome back to our “latest Under The Hood” column for the week ending February 5, 2021. As a reminder, this column will be published bi-weekly moving forward, and rotated on-and-off with our new Minor Leaguers column.
In this column, we analyze the most popular stocks during the week and find opportunities to either join in and ride these momentum names higher, or fade the crowd and bet against them.
We use a variety of sources to generate the list of most popular names. There are so many new data sources available that all we need to do is organize and curate them in a way that shows us exactly what we want: A list of stocks that are seeing an unusual increase in investor interest.
Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers… there is a lot of overlap.
The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we’re producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.
From the desk of Steve Strazza @sstrazza and Grant Hawkridge @granthawkridge
Marijuana stocks have been smoking hot over the trailing quarter, with the Alternative Harvest Marijuana ETF $MJ more than doubling since the election on November 3rd.
Considering this new leadership role over the near-term, today we’re going to do a follow-up on our last deep dive into the space, which we published last fall.
Back then, we were simply looking for a bottom and mean reversion move higher, which we got… Now, with the industry making new highs, we want to see how things are looking on both an absolute and relative basis.
And as always, we’ll check in on some of our past trades in the space and highlight today’s strongest stocks, along with trade setups skewed in our favor that we want to use to express our bullish thesis.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
In a post last month JC discussed the recent strength in Commodities and posed the following question…
If the CRB Index is above its 2016 lows and Crude Oil is above all those former lows from the past decade, how can we be bearish commodities?
Over the last few quarters, we’ve seen more and more intermarket relationships make a significant shift in favor of risk-assets.
Many are showing early signs of a structural reversal and others simply accelerating in the direction of their underlying trend.
From Bonds and Agriculture, to Chinese equities, and cyclical stocks like SMIDs, Materials, and Transports – Well, now we’re seeing it show up in Commodities.
Today we’ll follow-up on JC’s post with a comprehensive look at the Commodity complex and discuss whether the recent rally is simply a counter-trend move, or if a potential structural reversal is underway for this long-forgotten asset class.
As February gets under way, it’s time to review positions with February options that remain open (haven’t already hit profit targets or been stopped out). This month there isn’t much to discuss as most of our February options trades have already been closed out thanks to hitting their profit targets or getting stopped out.
Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.
At the time of this writing, I’ve only got 2 remaining positions with Feb options.
In the scoreboard below I denote the date we exited each position:
[Read more…]
