From the Desk of Kimmy Sokoloff

Overall it was a decent day for the indices, considering we had data out at 10 a.m. ET and then FOMC minutes at 2 p.m.

I'd still like to see the indices trend higher. Specifically, I'd like to see $SPY 387.80.

This is the video recording of our January 4, 2023, Inside Scoop Weekly Strategy Session.

Happy New Year everyone. How are you playing it?

This morning, our analyst team was bouncing ideas around when I posed the group this question:

"It's the beginning of a new year. Do we want to continue buying strength (as we have been)? Or do we want to buy some well-selected dips on stocks in sectors we like?"

In other words, what's our appetite?

The prevailing sentiment that won out was that we have been buying strength -- and that has worked well in some areas, particularly homebuilders, Chinese stocks, and metals stocks. But the reward-to-risk opportunities right now may be more favorable in the "buy-the-dip" camp.

So with this in mind, let's take a look at a stock in the semiconductors sector that has our attention.

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

Doing some basic math, the odds continue to favor a strong year for stocks in 2023.

There are some people out there who think the Nasdaq is the stock market. There are others who "only buy growth stocks".

I don't know what kind of masochist you need to be to think that way, but both of those are very foolish approaches to life.

The Nasdaq is full of growth stocks. And growth stocks historically underperform and make little progress when interest rates are rising. I'm not sure if you heard, but interest rates have been rising!

Since the Stock Market bottomed in June, the majority of stocks and sectors are up and to the right. It's only the biggest losers that are down, and there aren't that many of them. It's really just those nasdaq / growthy stocks that the masochists are focused on.

Make no mistake: Volatility is around the corner.

While price action is trending in nature, volatility mean-reverts. Periods of low volatility precede volatility expansions and vice versa.

So, where do we find ourselves today?

Bitcoin's price stability is at its third-highest level in the last five years.

Have you noticed?

Crypto volatility has completely died off. You'd probably get more juice trading the equity indices than shitcoins these days.

These extremes in volatility -- or lack thereof -- don't last long.

So, we're placing a high likelihood that Bitcoin will make a decisive move in the coming weeks.

And how are we looking to profit from this upcoming move?

The largest insider buy on today’s list comes in a Form 4 filing by the president and CEO of CarMax, Inc $KMX, William D. Nash.

Nash disclosed a $501,255 purchase of KMX shares.

From the Desk of Kimmy Sokoloff

S&P futures are indicating at the 3,850 mark.

We need to maintain that level in order for this index to head higher.

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 into Automobile Sector.

This is the video recording of our January 3rd Monthly Charts Live Strategy Session

It's the 2023 inaugural weekly currency edition of What the FICC?

And we're kicking it off with the US Dollar Index $DXY!

Check it out!

From the Desk of Ian Culley @IanCulley

I’m not big into seasonality.

I pay attention to it, of course. But it’s not in my top three data points after price. 

Don’t get me wrong, seasonality brings context and enhances awareness of any given market – which should be a priority for any trader or investor.

I have multiple almanacs on my desk, including the Stock Trader’s Almanac by Jeff Hirsch and Christopher Mistal and the Spectra Markets Trader Handbook and Almanac by Brent Donnelly and Justin Ross.

...

From the desk of Steve Strazza @Sstrazza

Our Top 10 Charts Report was just published.

In this weekly note, we highlight 10 of the most important charts or themes we’re currently seeing in asset classes around the world.

New Relative Lows for Growth

The relationship between growth and value has leaned heavily in favor of cyclical stocks as we see fresh new lows in this ratio. As long as this downtrend is intact, the best course of action is to remain overweight value-oriented areas and stay away from growth.

From the Desk of Kimmy Sokoloff

We saw a nice pop in the morning and then a hard fade pretty much right after the market opened. Feels like a repeat of last year.

The market did try to hang on to the $SPX 3,800 level most of the day. It's all about this level right now; a true break below and we can see 3,780.

We need back above 3,840 for a rally higher.

From the desk of Steve Strazza @Sstrazza

Check out this week's Momentum Report, our weekly summation of all the major indexes at a Macro, International, Sector, and Industry Group level.

By analyzing the short-term data in these reports, we get a more tactical view of the current state of markets. This information then helps us put near-term developments into the big picture context and provides insights regarding the structural trends at play.

Let's jump right into it with some of the major takeaways from this week's report:

* ASC Plus Members can access the Momentum Report by clicking the link at the bottom of this post.

Macro Universe:

• This week, our macro universe was slightly negative, as 64% of our list closed lower with a median return of -0.13%.
• The 30-Year Yield $TYX was the winner again, closing with a 3.87% gain.
• The biggest loser was Lumber $LB, with a weekly loss of -2.68%.
• There was no change in the percentage of assets on our list within 5% of their 52-week highs – currently at 2%.
• 15% of our macro list made fresh 4-week highs, and 9...

From the Desk of Steve Strazza @sstrazza and Alfonso Depablos @Alfcharts

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...

From the desk of Steve Strazza @Sstrazza

Welcome to our latest Minor Leaguers report.

We've had some great trades come out of this small-cap-focused column since we launched it back in 2020 and started rotating it with our flagship bottom-up scan, Under the Hood.

For the first year or so, we focused only on Russell 2000 stocks with a market cap between $1 and $2B.

That was fun, but we wanted to branch out a bit and allow some new stocks to find their way onto our list.

We expanded our universe to include some mid-caps.

To make the cut for our Minor Leaguers list, a company must have a market cap between $1 and $4B.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to...

What a year, eh?

The S&P 500 posted its worst return since 2008!

I think it's fair to say that if your portfolio survived 2022, you're doing a great job.

You even outperformed most funds and equity managers. Just think how well you can do in a more favorable environment.

To that point, just because it was a bad year for markets doesn't mean it had to be a bad year for YOU.