From the Desk of Steve Strazza @Sstrazza

We all know how dreadful it can be to get through airport security.

Clear Secure is trying to be the remedy by using biometric data to provide identity verification and expedite security at airports and other venues.

Last quarter, the stock rallied over 20% following its earnings report and has nearly doubled since.

Despite the stock's strong performance and highest price since 2021, the bears are still betting against it. The amount of shares held short is near its highest level in history.

Let's talk about how we're playing it:

During the gold rush of the 1800's, there were fortunes made by some who were digging for and discovering gold.

But the REAL money was made by the entrepreneurs who were selling the pics and shovels to those gold speculators.

Along this similar train of thought, there are more than just semiconductor manufacturers that are going to benefit from the massive amount of investment done in the Artificial Intelligence space.

Today's trade is a year-long bet in one area that is starting to get attention by the AI players.

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

In this scan, we look to identify 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...

In today’s Daily Digest, we’ll review the following:

1. New position in TLT.
2. No adjustments are needed today.
3. No exits since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Earnings season used to be a time I didn't necessarily look forward to as a swing trader.

On the one hand, I've always viewed it as great for bringing volatility and movement to the markets -- which traders thrive on for making money.

On the other hand, I was always uneasy about holding open swing trades overnight into a binary earnings reaction.

I learned this unease in my early trading years when I traded stocks for the very simple reason that my good-til-canceled stop loss order was meaningless in the event of an overnight gap through my stop loss level. I didn't have as much control as I'd like. In fact, in these situations, I had none.

It's taken me some years to warm up to the fact that I don't necessarily need this same mindset when trading defined risk options positions and spreads.

Yes, I can still lose money if a stock gaps through my risk management level (the level I predetermined at which I would close my losing position). But if my risk was defined -- meaning I know the maximum I can lose, and no more -- then an earnings gap in my face will only result in a loss that is more or less like any other loss I take.

I generally keep...

The most significant insider activity on today's list comes via a Form 4 filing by Liberty 77 Fund.

This time, the private equity fund reported an additional purchase of $5.4 million in Lions Gate Entertainment Corp $LGF.

Chairman and CEO Matt Murphy revealed the acquisition of 13,000 shares of Marvell Technology $MRVL.

While there can be many reasons for an insider to sell shares, there's typically only one reason they buy — they believe the stock is going up.

And if the CEO is buying now, at these levels, it signals strong conviction in the company’s prospects.

Here’s The Hot Corner, with data from October 15, 2024:

Boxer Capital LLC filed a 13D for Tyra Biosciences Inc $TYRA revealing an increase in ownership from 12.20% to 12.40%....

Do you want to find the fastest moving stocks every day? 

These are stocks that never would have gotten on your radar.

Want to learn how? 

We’ll show you exactly the way to do it on Wednesday, October 16, at 2:30 p.m. ET.

I'll see you there!

...

The crypto community has done a terrible job of educating people what the hell all these tokens do.

Let's face it, none of us have time to dig through hundreds of whitepapers full of complex jargon.

The end result is no one knows what all these tokens do.

This is a problem.

But I think I have a solution.

On today's Flow Show, Steve Strazza and I discussed the two different markets we are each experiencing. He's experiencing one of great breakouts and follow-through. I'm experiencing one of frustration.

Same stock market, different results. That is information. We get into it.

This bull market appears to be on the verge of another leg higher and it might be led by the financials. We both liked the idea of finding alpha down the cap scale in smaller regional banks to participate.

Here's a daily chart of U.S. Bancorp $USB:

Today, the stock is printing fresh 52-week highs. 

However, it should be noted that U.S. Bancorp announces earnings before the market opens tomorrow. This introduces binary risk that we need to be aware of and this will affect my position sizing (hint: trading smaller than I normally would).

But we're not going to let earnings keep us away. We feel it could be just the catalyst this stock needs to follow through on this breakout and make a run at $60 per share, or higher.

Here's the Play:

I like buying $USB March 50 calls for approximately $2.30 per...

When I think about bonds, credit spreads are always at the top of my mind because they provide an excellent gauge of market health.

We simply measure the yield difference between a Treasury bond and a High-yield bond with the same maturity.

Another way to do it is by looking at the prices of the High-Yield Bond ETF $HYG compared to the Treasury Bond ETF $IEI:

When bond market investors are confident and willing to take on more risk, they drive up the value of High-yield bonds, causing this ratio to increase or credit spreads to narrow.

Conversely, when investors seek safety, credit spreads widen, which doesn't not bode well for risk assets.

As you can see in the chart, this ratio is pushing up against its highest level of the year.

This action suggests that there's no systemic risk upon us.

As long as that remains true, we can feel comfortable that equities and risk assets, in general, will stay in good shape.

Hope you enjoyed this post!

In today’s Daily Digest, we’ll review the following:

1. No new positions today.
2. Rolled KRE into December options.
3. Exited GDX for a profit.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Due to Monday’s holiday there are no insider filings to report today. We’ll be back tomorrow with a look at that activity.

In the interim, Sea Ltd $SE has been on our radar ever since Rep. Kurt Schrader reported a position in a political filing back in 2022.

When the guys returned from Asia last year, we started stalking it even more closely. While it had an exciting growth story, more importantly, it had no evidence of a bottom. 

The stock was free-falling in a 90% drawdown back then.

So, we've been waiting patiently for a perfect pitch for some time now. 

We need to see clear signs of a trend reversal before we follow insiders into their trades. While our hot corner data is great, the chart always comes first.

And after several years, we finally think this chart is ready for us.

When we first traded it in March of this year, ...

Everything was working today.

US indexes all booked nice gains, with the Dow and S&P achieving another new all-time high.

There was a synchronized global rally led by China’s Shanghai and Shenzhen, both up over 2%.

Software, financials, industrials, General Electric, Nvidia, Goldman Sachs… 

They all had one thing in common to start the week: new highs.

But it was the crypto market, more than anything, that was giving me the risk-on feel.

Alts are waking up here. Our custom altcoin index was up over 6% today.

More importantly, it looks like Bitcoin is about to break out of this range we’ve all been waiting for.

Here’s how I know:

This is a triple-pane chart of the three premier crypto market equities. 

MicroStrategy, Robinhood, and Galaxy Digital have all been consistent leaders during this cycle. As such, I view them as preferred vehicles for expressing bullish bets on BTC and crypto.

They also offer a nice mix of crypto market exposure, with one acting as a juiced BTC fund,...

From the Desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the two weeks ended October 11, 2024. This report is published bi-weekly, in rotation with The Minor Leaguers.

What we do here is 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.

Click here for a behind-the-scenes look at our process.

Whether we’re measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers, there’...

Earlier this year we wrote about platinum futures gearing up for a breakout as gold futures were printing fresh all-time highs.

So far the trade has been a dud as the price action has been a rangebound mess.

But the former powerhouse is setting up for us to take another swing at it.

Let's talk about the little silver: