From the Desk of Ian Culley @IanCulley

The dollar is dropping!

It’s finally time to bet on some sustained downside action, and the euro is my vehicle of choice.

I laid out the conditions that would flip my outlook on the euro earlier this month. Three weeks later, the pieces have fallen into place for a bullish position.

Let’s take a look.

This is still the one folks.

I've been in the camp that we're only getting bull markets in stocks around here if the Dollar is falling.

And well, a funny thing happened last month: The Dollar started falling, particularly against the most important crosses.

This happened once the journalists finally realized the Dollar had been so strong. And you know what tends to happen when they finally get the memo ;)

Take a look at the Dollar rolling over vs both the Euro and British Pounds:

I was talking with a relatively new day trader last night at my twice-monthly trader meetups here in Colorado. We were chatting about stop losses. Or more specifically, his inability to stick to his “mental stop loss levels.”

As you can imagine, this was leading to him taking occasional big losses – which were wiping out good runs in the market.

He’d make a few hundred bucks several days in a row. He’d then lose it all (and then some) on one bad trade.

A lightbulb went off in his head when I reframed the importance of not taking big losses. No doubt many of you are shaking your heads and uttering – duh!

But for this gentleman, it took me breaking it down this way for him to get the picture: 

Many stocks are no where near their all-time highs.

The S&P500 still needs to rally 25% just to get back to its former highs. And that's after the 10% rally that we've already seen in October.

The Nasdaq100 would need to go up another 43% from here just to get back to its highs. And again, that's after it already ripped 12% off its lows this month.

Remember, the average Nasdaq stock fell 44% from its highs during the bear market. The average small & micro cap stock dropped about 50%.

And since most stocks are so far from their highs, investors are having a hard time calling this a bull market.

"They need to make new all-time highs for it to be a bull market", they say to me.

So ok, let's play that game.

None of these prices here below were new all-time highs. So was this a bear market then?

How do we know if we're in a bull market or not?

Generally speaking, more stocks are going up than going down in bull markets.

And sure, there are a lot of different ways to quantify it, but this is really the gist of it: Are more stocks going up or are more of them going down?

It really is that simple.

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...

Where is the defensive rotation?

I was told US Stocks were in a bear market.

For those keeping score at home, the NYSE new lows list peaked in June. That was over 4 months ago.

But Consumer Staples have been underperforming since May!

Why are you an investor?

Have you asked yourself that recently?

Why do you take time out of your life to enter into the arena that we call markets?

Are you here to make money?

Or would you rather gossip about fed??

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.

I'm old enough to remember when stocks would go up for multiple weeks at a time.

They used to call those uptrends where I'm from.

So how about a 3rd straight week of gains for the Dow Jones Industrial Average?

That's something you don't see every day:

Wednesday night we held our October Mid-Month Conference Call, which Premium Members can access and rewatch here.

In this post, we’ll do our best to summarize it by highlighting five of the most important charts and/or themes we covered, along with commentary on each

Let’s get right into it!