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:

Below is the 3rd ASC Mastermind Lab Course. These are special videos that will be made available throughout the duration of the 12-week course featuring conversations with professionals from across Wall Street discussing topics in their expertise. 

The theme of the first week of ASC Mastermind is focusing on defining personal objectives. So I thought I'd talk to a friend of mine who helps people reach their goals for a living: Dr. Phil Pearlman. 

Phil is the founder of The Pearl Institute, where he works directly with clients, many of whom are professional traders and investors, to improve their mental and physical health. He also writes a tremendous Substack.    

Phil's ability to tie together human psychology, mental health, and financial markets is second to none. I hope you enjoy.  

Below is the 2nd ASC Mastermind Lab Course. These are special videos that will be made available throughout the duration of the 12-week course featuring conversations with professionals from across Wall Street discussing topics in their expertise. 

With the first Mastermind class focusing on defining personal objectives, it only makes sense for me to get an advisor's perspective. That's where Stephen Weitzel comes in. 

Stephen is the Managing Partner, Reveille Wealth Management, a firm with over $1 billion in assets under management. And the things I discussed in our first class are the very things he discusses with clients every day. 

How do you identify your own time horizon and risk tolerance? Should you just buy and hold forever? What can you do to minimize drawdowns?

At the end of the day, Stephen is both managing and building wealth for his clients. And his ability to answer these questions is part of what helps him do that. 

Enjoy my conversation with Stephen....

Today, I fielded a question from a trader who has a winning options trade on. 

When he originally put the trade on, he didn't have a stop-out price in mind. It was a bit of an "all-or-nothing" trade. His risk is defined and he was comfortable with the fact that if he lost, he would probably be a 100% loser. Nothing wrong with this, as long as the position sizing is right.

Fortunately for him, the trade has gone his way and he's sitting on some handsome profits, yet the stock still has work to do to get to his profit target.

His question to me, paraphrased, is:

"I didn't originally have a stop for this trade; but now that it's winning, how do I determine if/when I should apply a trailing stop to protect my open gains?"

I'll classify this as a "first-class" problem. His issue is, how does he give this position as much room as possible to continue growing, while ensuring he can still escape with a profit if/when the trend ends?

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 September 27, 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...

Last summer, me and Steve Strazza toured Southeast Asia.

We didn't know where anything was, or how to use public transportation.

Thankfully, there was an Uber-like ride-sharing service that helped us out.

We've been waiting for an opportunity to get involved in it's stock since then, and we may finally have our opportunity.

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

1. New position in EEM.
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 Form 4 filing by Control Empresarial de Capitales S.A.

The investment company reported a purchase of Talos Energy Inc $TALO shares with a total value of $6 million.

Here’s The Hot Corner, with data from September 27, 2024:

There are few updates.

I am still bullish over the coming months and quarters. Crypto looks to be shaping up rather nicely.

Over the short-term, however, there is a small bearish price setup.

I'm headed to the beach today.

It's been a rainy and windy week in the Florida Keys so we've been all couped up inside.

Now that the Hurricane Helene storm system has played its course, we're due for some beautiful weather.

I woke up this morning and I checked the forecast.

It said the sun will be shining.

Another thing I typically do from bed each morning is check my crypto accounts and watchlists. 

When I did, I noticed the SOL is shining too.

Solana has rallied about 20% since the middle of last week.

When it comes to the overall crypto market, Solana is as important as anything.

It is the 4th largest token with a market cap of about $74B. For context, if Solana was in the S&P 500, it would carry a larger weight than large cap stocks like Target, Crowdstrike, and FedEx. It's a big deal.

But more importantly, Solana is the secular leader when it comes to crypto. 

It tends to move first, and tip off the rest of the asset class, and it tends to outperform during bull cycles.

Solana kicked off the new crypto bull market with serious momentum back in January of 2023. And then again last fall,...

When it comes to our short-squeeze universe, the best trades tend to come from the junkiest stocks. 

In late 2022, we went dumpster diving for the most beat-up and heavily shorted stocks in the market and had some big winners. We were at the depths of the bear cycle, and the charts looked terrible. They were supposed to be zeros, but they weren't.

Just look at how Carvana $CVNA has performed since we were buying it at 8.25 almost 2-years ago.

Another junky group that has been working recently is the Marine Shipper industry.

Our custom Marine Shipping Index is on the verge of reclaiming the 61.8% retracement of its prior drawdown:

The unfortunate thing about most shippers is that they have little short interest.

But they trade like they do...

These stocks can rally several hundred percent in a short amount of time when they trend.

Even better, we're outlining a trade for one of the best-performing Marine Shippers and this one does have a massive short interest. We think this trade could be a multi-bagger.

...

This is the weekly post that aggregates all the charts we put together throughout the week and organizes them all into one, easy to flip through deck.

Chinese equities are surging like never before in history.

The iShares China Large-Cap ETF $FXI rallied over 18%, marking its best week ever.

We call this a "momentum thrust". Such extreme readings often precede rallies and tend to occur at the beginning of new bull cycles.

Here's the FXI chart with the 1-week rate of change in the lower pane:

As you can see, this is happening after a test of a critical support level, right at a shelf of former lows.

In addition, price is reclaiming the VWAP from the 2021 highs, which means bulls are back in control for the first time since then.

One thing we know for sure is that seeing the most beaten-down areas of the market spring back to life with such vigor is not a bearish development.

In fact, I think it’s time to embrace these high beta stocks.

They are on the rise.

And as technicians, we want to take advantage of these new uptrends.

Just look at what Sean McLaughlin,...

Below is the first ASC Mastermind Lab Course. These are special videos that will be made available throughout the duration of the 12-week course featuring conversations with professionals from across Wall Street discussing topics in their expertise. 

If you watched the first Mastermind class on Defining Personal Objectives, you heard me talk about diversification. Well, meet Chris Cain. Chris is the U.S. Quantitative Equity Strategist for Bloomberg Intelligence, a division of Bloomberg LP, and he literally studies diversification. 

Chris and I discussed mathematics behind diversification, and how diversification can impact your long-term returns more than you even know. 

Enjoy this conversation. 

Have you heard about China?

Chinese stocks just had their best week in history, following the People's Bank of China's (PBOC) announcement of rate cuts, among other stimulative actions.

In July, we talked about Copper and its base and industrial metal peers showing broad weakness. But that seems to be changing...

China is the world's largest consumer of refined copper, so base and industrial metals have benefited from the recent pivot from the PBOC.

Chinese stocks and copper futures have been positively correlated for years:

The 200-day rolling correlation flipped negative earlier this year but is positive again and has recently been screaming higher toward its highest positive correlation in history.

This week, the China Large-Cap ETF $FXI decisively broke a multi-year downtrend line and entered a new primary uptrend.

If the path of least resistance is higher for Chinese stocks, the 29th element should also catch a bid.

Earlier this year, Gold broke out to new all-time highs, but Copper...

Despite the gloomy headlines the market received this summer, major stock market sectors are showing resilience across the board, with new signs of life emerging. 

A shift seems to be on the horizon.

At the moment, we are long bonds. We like bonds, and the charts tell us we are right to like bonds here, but what does the future hold?

If inflation starts ticking up again, the market usually pivots toward the reflation trade—favoring sectors like energy, small caps, and financials as rates rise. (I am not saying that this is happening. I am saying that we need to keep an eye on this.) 

Energy has not participated in the bull run this year. When we compare XLE to some of the best stocks this cycle, like XLK, the performance gap is wild.

The chart below shows XLK up roughly 40% over the trailing 12 months while XLE is negative.

Meanwhile, the rally in bonds appears to be slowing down. 

Bonds have a traditionally inverse relationship with energy stocks, so we think this further sets the stage for a catch-up trade from oil and gas.

Oil...

From the desk of Steve Strazza @Sstrazza

Our International Hall of Famers list is composed of the 100 largest US-listed international stocks, or ADRs.

We've also sprinkled in some of the largest ADRs from countries that did not make the market cap cut. 

These stocks range from some well-known mega-cap multinationals such as Toyota Motor and Royal Dutch Shell to some large-cap global disruptors such as Sea Ltd and Shopify.

It's got all the big names and more–but only those that are based outside the US. You can find all the largest US stocks on our original Hall of Famers list.

The beauty of these scans is really in their simplicity.

We take the largest names each week and then apply technical filters in a way that the strongest stocks with the most momentum rise to the top.

Based on the market environment, we can also flip the scan on its head and filter for weakness.

Let's dive in and take a look at some of the most important stocks from...

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

1. No new positions today.
2. Rolled XLC position 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!