This is the recording and the chartbook from our October 2024 Monthly Candlesticks Strategy Session.

Below is the video and slide deck for Week 2 of ASC Mastermind: Momentum Trading And Why It Works. 

With stock market investors looking every which way at different market-moving headlines today, let's take a step back and talk about what's really important.

We just got monthly candles. It's time to zoom out. 

And when we do, is there a chart more important than the US Dollar Index $DXY right now?

The dollar has had a very strong inverse correlation with stocks and other risk assets for several years now.

Equities have done well for the past two years while the dollar has been rangebound. 

Just imagine how they'll do if DXY breaks down from its current range:

This is the question investors should be asking themselves right now.
 
Instead of worrying about the war in the Middle East or the longshoremen and dockworkers striking…
 
The real question that matters for all our portfolios, not just today but over longer timeframes, is whether DXY digs in at this support level or breaks down.

If it's the former, look for today's corrective action to have some legs.

If it's the latter, we should be buying this dip aggressively.

Last week, we suggested...

Despite the recent volatility, gold continues its steady ascent, unaffected by the broader market noise. 

As seasonals have shifted and new leadership has come and gone this year, gold remains resilient, moving through market regimes with ease.

Whether stocks rally or risk-off sentiment prevails, gold thrives. The yellow metal has been red-hot all year.

In these times, the saying goes, "there is no fever like gold fever." 

But, is there any evidence of this kind of euphoria among investors yet?

While the COT report suggests sentiment may be overstretched, let’s talk about what we’re seeing on the ground.

There’s little buzz about gold in the financial media. No bold predictions of $10K gold on magazine covers, no headlines touting it as the ultimate safe haven in an impending crisis—signals that often show up at market tops. We’re just not seeing it.

For context, in 2011, fears of currency depreciation were rampant. The covers of TIME magazine and Smart Money allow us to remember this moment. They came right at the top.

...

We've seen a bit of a rise in volatility this week, and while it is not something that should be ignored or scoffed at, I do think it offers us options traders an opportunity to position for some volatility mean-reversion, especially in some big-cap names that are stuck in ranges, ideally tightening ones.

Today's trade is in a well-known name that already has earnings out of the way and fits the bill for some continued sideways action.

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. No new positions today.
2. Rolling USO to November options.
3. No positions were exited since the last report.
4. Current status of open campaigns.
5. Volatility Snapshot.

Let’s dig in!

Reminder: Tonight @ 6PM ET is our LIVE Conference Call for Premium Members of ASC Research. This is where walk through the most important trends and share our best ideas to profit from the current sector rotation that is dominating these markets.

As a Premium Member, you also get complimentary access to our 12-week Mastermind. This week is all about Why Momentum Works and How To Profit From It. 

Click here to join us as a Premium Member of ASC Research and get access to tonight's LIVE video conference call, 24/7 access to Premium Trade Alerts and our 12-week LIVE Mastermind.

Momentum Week begins today!

...

The most significant insider activity today involves Wave Life Sciences Ltd $WVE. 

A Form 4 filing by GSK plc reports a purchase worth $22,335,440. 

In addition, a 13D filing from RA Capital Management reveals an increase in its ownership stake from 12.30% to 16.00%.

Here’s The Hot Corner, with data from September 30, 2024:

With stock market investors looking every which way at different market-moving headlines today, let's take a step back and talk about what's really important.

We just got monthly candles. It's time to zoom out. 

And when we do, is there a chart more important than the US Dollar Index $DXY right now?

The dollar has had a very strong inverse correlation with stocks and other risk assets for several years now.

Equities have done well for the past two years while the dollar has been rangebound. 

Just imagine how they'll do if DXY breaks down from its current range:

This is the question investors should be asking themselves right now.
 
Instead of worrying about the war in the Middle East or the longshoremen and dockworkers striking…
 
The real question that matters for all our portfolios, not just today but over longer timeframes, is whether DXY digs in at this support level or breaks down.

If it's the former, look for today's corrective action to have some legs.

If it's the latter, we should be buying this dip aggressively.

Last week, we suggested...

On today's Flow Show, Steve Strazza and I discuss this morning's frustrating start to Q4, and whether or not it means anything.

A 20%+ rise in $VIX is not something that should be ignored. But is the market overreacting to today's down tape and is this just related to repositioning in a new month and quarter?

Regardless, we've got a stock on our radar today that is caught up a bit in the news cycle, has a lot of traders caught in short positions, and could be ripe for an epic squeeze if the stock can get out from under a declining Anchored VWAP.

Here's a chart of ZIM Integrated Shipping Services: 

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

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

Let’s dig in!

The most significant insider buy on today's list comes via a 13G filing by Madison Avenue Partners.

The investment firm revealed an initial stake of 5.10% in John Wiley & Sons Inc $WLY.

Director Douglas G. Bergeron reported a purchase of $2,100,834 in Cantaloupe $CTLP.

Here’s The Hot Corner, with data from September 30, 2024:

Large Speculators haven't owned this much Gold since 2020. We have the data.

In precious metal bull markets, it's perfectly normal for Commercial Hedgers to offset their physical positions by shorting the underlying futures contracts.

We also tend to see the Speculators build massive net-long positions.

Check out the extreme Commercial Hedger net-short position in Gold and Silver futures:

This is as extreme as it gets. So, with the positioning so stretched, who is left to buy?

Let's talk about it: