We've adjusted a position in the Paid-to-Play portfolio today:

The largest insider transaction on today's Hot List is a Form 4 filing by Samuel Cowley, general counsel and secretary of Insight Enterprises $NSIT.

Cowley reported a purchase of $853,065 in NSIT.

From the Desk of Kimmy Sokoloff

The market is jittery this morning as we await more economic data, more importantly inflation data.

In January, Fridays were very strong. In February, Fridays have overall traded higher but very lackluster.

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.

This week we're looking at Capital Goods stocks.

Wall Street analysts keep raising their estimates.

This, of course, is happening as the prices of these stocks keep on going up.

This is classic behavior for bull markets.

You can see the revisions trend rising as the price of the S&P500 keeps heading higher:

From the Desk of Ian Culley 

Rates continue to rise along with concerns of an impending recession.

The narrative is quickly shifting back to tighter monetary policy following last week’s higher-than-anticipated CPI and strong economic data. I don’t pay too much attention to this gossip. But I do keep a pulse on the latest discourse surrounding markets.

With these newfound recessionary fears circulating, I want to share a chart I like to avoid… The 2s10s treasury spread.

I can’t remember the last time I wrote about the yield curve. It’s been so inverted (deepest inversion since the early 80s) for so long that I honestly don’t know what to think.

Nevertheless, the overlay chart of the Staples sector $XLP relative to the S&P 500 $SPY with the 2s10s spread conveys an important piece of information:

Despite an inverted yield curve, the relative downtrend in staples remains intact. 

Why does this matter?

Defensive leadership (a...

It sounds so simple.

To win at trading means to take profits.

If there are no profits taken, there is no winning. And if there is no winning, then what am I even doing here?

Subscribers to the various options education services we provide at All Star Charts know that I’m usually very clear about where I’ll take profits in the various trades I put on. Most trades have a profit target and I set the GTC limit orders out in the market and let them get hit. I’m hands-off. Unemotional.

So it would seem that I’m pretty automatic about this practice of profit-taking in all realms of the market in which I engage.

You might be surprised that this hasn’t been true in my personal index options trading.

From the Desk of Kimmy Sokoloff

This morning the market popped.

Then it faded most of the day until about 1:00 p.m. ET, when the rally started, right off of support.

$SPY dipped below 396.76, and then it bounced from there.

This is the video recording of the February 23rd, 2023, Weekly Town Hall w/ Willie Delwiche.

2/23/23 2:00 PM ET

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

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

We've adjusted a position in the Paid-to-Play portfolio today:

It's the weekly currency edition of What the FICC?

It’s victory at sea across currency markets. But it's not stopping the US dollar from cutting through the chop...

Check it out!

The most underrated element of technical analysis has to be relative strength.

It's impossible to outperform your benchmark if you own assets that are underperforming.

Much of this work is grounded in the overarching notion that asset prices trend while volatility mean-reverts.

But humans behave as if it's the opposite.

Relative strength is merely denominating prices in a different asset than the native currency. Like price trends, relative strength also exhibits a tendency to trend, rather than mean-revert.

So, what does that mean?

The most significant insider transaction on today's Hot List is a Form 4 filing by Mark J. Erceg, the CFO of Newell Brands Inc $NWL.

Erceg reported a purchase of $999,833 in NWL.

From the Desk of Kimmy Sokoloff

As I write this note, the only reason the market is up is because of $NVDA’s earnings.

We have GDP today, and that might change the tune. Hopefully, we continue to hold $SPY 400.

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 Hall of Famers, 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.

We...

From the Desk of Willie Delwiche

The NAAIM exposure index surpassed its August high last month and has been on either side of its April high over the past two weeks. With price action cooling, active investment managers may regret their eagerness to increase equity exposure.    

Why It Matters: Active managers led the recent shift from pessimism to optimism. While sentiment overall doesn’t look ready to boil over at this point, there are some hot spots that could benefit from cooling. The NAAIM data, which has outpaced the recovery in price, is in that category. The broader sentiment risk is that a period of sideways price action leads reluctant optimists to turn bearish again. At this stage in the cycle we need bulls to have a bull market and a return to pessimism would likely add to downward pressure on price. This is all the more likely if volatility remains undiminished (only 4 years in the past quarter century began with more 1% swings in the S&P 500 than we have experienced so far this year) and breadth meaningfully...

From the Desk of Kimmy Sokoloff

$SPY struggled all day to stay above the 400 level.

Now we have support at 396.76. If we break that, we can see 393.20.

From the Desk of Ian Culley @IanCulley

Challenging conditions prevail across currency markets. 

It’s victory at sea! 

But that’s not stopping the dollar from cutting through the chop.

Does that mean it’ll go on a run, applying downside pressure on risk assets?

It’s tough to say.

Nevertheless, I have one chart for you that provides clarity as the dollar begins to make its move.

Check out the triple-pane chart of the US Dollar Index $DXY, our G-10 currency index, and our US dollar advance-decline line:

At the top, we have six pairs dominated by the euro. I’ve been vocal about the significance of the euro trading below 1.08. It’s basic math.

The EUR/USD comprises more than half of the DXY weighting. If it’s trading below 1.08, it’s messy with downside risks – the perfect environment for a dollar rally.

It’s not just the euro. The lower two panes...