This week we're looking into Capital Goods sector stocks.

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...

From the Desk of Steve Strazza @Sstrazza 

In case I haven't been obnoxious enough, we are in the early stages of a new bull market.

I cannot be more clear about this. I feel it in my bones.

Today, the Fed had their first meeting of the year, and did exactly what everyone thought they would do. The market flew straight into rally mode as soon as the press conference began. There were no surprises.

This is because, very much unlike 2022, the path of least resistance for risk assets is now higher.

We're seeing risk-on action characterize the tape on a regular basis.

Breakouts are sticking. The list of new highs is growing longer and longer. Meanwhile, new lows are almost non-existent, and the breakdowns from December have failed and followed through higher.

It's all bull market stuff.

Along the same lines, we're seeing more and more stocks offer bullish chart setups that we want to be buying. And we're entertaining all of them.

It's time to be aggressive on the long side.

Be sure to check out...

From the Desk of Ian Culley @IanCulley

Everyone wants to know where the dollar is headed next.

It’s great investors are showing interest in the dollar, while understanding the impact it has on risk assets at the moment. 

But I have no idea where the dollar is headed. No one does.

Regardless, I can still form a framework to help make the best logical guess despite an incomplete data set. That’s what we do at All Star Charts!

So let’s recap three points I’ve made regarding the dollar in recent months that I believe hold the greatest weight…

The Time and Place for a Bounce

Given strong seasonal tailwinds and a critical shelf of former highs acting as potential support, the likelihood of a dollar bounce last month seemed probable…

The US Dollar Index $DXY has enjoyed the best returns...

From the Desk of Kimmy Sokoloff

What a day... February started off with a bang!

I mentioned in the live trading room that if the market likes what Fed Chair Jerome Powell has to say we can see $SPY 410.

We sure did hit that level... and then some.

Every investor is different.

We have different time horizons, objectives, goals, and appetites for risk.

It's for this reason that the endeavor of trading is often a lonely one; you're forced into fine-tuning what works best for your needs.

What works for me isn't going to work for you.

This is self evidently true.

It seems to me that one of the overlooked elements of this discussion is the variability of human personality.

This is something I've been pondering as of late, so I thought I'd lay bare my potential fallacious thoughts to see if we can strive closer to some answers.

From the desk of Willie Delwiche.

The January AAII asset allocation survey shows household equity exposure rising for the third month in a row and climbing to its highest level since May.    

Why It Matters: Despite last year’s stock market turmoil and claims of pessimism, investors did not abandon equities. After approaching a 20-year high in November 2021, stock exposure waned over the course of 2022 but never did drop below its long-term average. Historically, the best gains in the market come after investors become bearishly positioned (stock exposure down and cash exposure elevated). That is a pivot that has not taken place this cycle (not yet, at least). The under-owned and unloved asset classes remain bonds and cash (and commodities, which don’t even make it as a category in the AAII survey).

In this week’s Sentiment Report we take a closer look at the implications of this positioning data, how investors are responding to stock market strength this year and what valuations tell us about risk and...

This is the video recording of our February 1, 2023, Inside Scoop Weekly Strategy Session.

[9/7: updated stop to 56]

As promised during yesterday's The FLOW show, I'm following up on a possible trade idea we discussed.

However, after Strazza and I put our heads together with the rest of the Analyst team this morning, we're going to attack an opportunity in Schlumberger $SLB from a different angle -- one that can be rewarding regardless of which direction the stock takes.

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

Where I come from do you know what we call higher lows and higher highs?

Uptrends.

Do you know what stocks do in bull markets?

They go up.

And speaking of going up, we just watched the Small-cap Russell2000 Index go out at new 10-month highs.

Do you know what's not evidence of a downtrend?

New 10-month highs.

The largest insider buy on today's list is a Form 4 filing by Randal Kirk, the executive chairman of Precigen $PGEN.

Kirk revealed the purchase of roughly $20 million of his own stock from him, increasing his ownership stake to 46.2%.

From the Desk of Kimmy Sokoloff

Hello, February! Let's see if you can live up to January.

Today is Fed day. I'm  sure we'll see wild swings in both directions initially, and then the market will subside.

These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.

This month’s Video Conference Call will be held on Monday February 6th @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.

Here are the details for Monday evening:

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

It’s easy to follow a trading plan when the price action is moving our way. We feel like geniuses.

Look at me! I’m so smart! The stock market is doing exactly what I planned for it to do! Let’s go car shopping!

But how do I feel if the price action goes the other way?

Assuming I’ve put a trading plan together that accounts for both the possibility of being right AND the possibility of being wrong, why should I feel any different when the price goes the wrong way?

What’s the point of putting together a detailed trading plan if I later exit the position following the first price move in the opposite direction I hoped for?

Why go through all that effort?

From the Desk of Kimmy Sokoloff

We closed January, the first month of the year.

And it's a positive start for 2023.

From the desk of Willie Delwiche.

Both our Risk On Index and our Risk On and Risk Off (RO/RO) Ratio have climbed to their highest levels since early last year and in the process crossed back above key levels that provided support during 2021 but were violated as conditions deteriorated in 2022.

Why It Matters: After an unprecedented combination of volatility and weakness in 2022, we are looking for evidence that the strength that has been seen in January marks a sustainable departure from last year and not just more of the same. There is still work to be done from a longer-term trend perspective and macro questions linger. Unlike the rallies that emerged and faded in 2022, however, this year’s gains are being accompanied by more appetite for risk. As long as the Risk On index and the RO/RO ratio are showing improvement (and that improvement is being confirmed elsewhere) it is probably premature to lean against the strength we have seen. That being said, not all opportunities are created equally....

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

It's a market of stocks.

People forget that.

They choose to obsess over every tick in the S&P500 or Nasdaq instead of recognizing what's happening among the actual components of those indexes.

As it turns out, this has become one of our competitive advantages.

If you're wondering why we tend to be ahead of the curve on changes in major trends, I would point to this.

Most people don't have the time (or are too lazy) to sit there and count how many stocks are going up vs how many are going down.