The most significant insider transactions on today's Hot List are Form 4 filings by the co-founder and an executive vice president of DISH Network Corporation $DISH.

Between the two, they disclosed a $24 million purchase of their own stock.

From the desk of Steve Strazza @Sstrazza.

Welcome back to our latest Under the Hood column where we'll cover all the action for the week ended May 13, 2022. This report is published bi-weekly and rotated with our Minor Leaguers column.

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.

From the desk of Steve Strazza @sstrazza

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.

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.

S&P 500 Tests a Key Level

Equities continue to look vulnerable as sellers remain in full control. When it comes to the major averages, we’ve had our eyes on the AVWAP from the COVID lows. In late April, the Russell 2000 and Nasdaq 100 violated these levels and followed it up with a fresh leg to the downside. Markets have continued to sell off since. 

Today, all eyes are on the S&P 500 which is now challenging its AVWAP from the COVID lows. This level represents the price the average investor has paid since March 2020, making it a critical level of interest.

What this really means is the average buyer since that time is now in a loss position. While this would be a logical place for bulls to step in and stop the carnage, we’re not seeing any sign of it yet. Until we do, be prepared for heightened volatility and further downside.

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:

The largest insider transaction on today's list is a Form 4 filing by George Lopez, founder and former CEO at ICU Medical $ICUI, who reported a $4 million purchase of his own stock.

We had two different insiders report purchases in the battered Bitcoin proxy MicroStrategy $MSTR.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

There’s always a bull market somewhere.

But the environment is tough right now.

Volatility is sweeping across markets. The dollar is catching a defensive bid. And the major averages continue their downward trajectory as investors desperately look for signs of a bottom. 

Yet, despite the bearish action gripping markets, we’re still finding bases we want to buy.

And, to no surprise, many of those smiley faces are in the commodities market.

That’s where we want to focus our attention.

Today, we'll highlight the wheat complex, outlining some tactical setups that complement our bullish structural outlook for commodities and grains.

Let’s dive in!

First up, we have Chicago wheat:

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 around the world.

Here’s this week’s list:

In Elon Musk’s latest internet musings, he let the investing public know that the Twitter acquisition is on hold for the due diligence process.

Here’s what he said:

From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge

Defense wins championships. 

It’s important to remind ourselves of this as risk continues to come off the table.

The largest stocks in the world are losing critical support levels, and even the leaders are coming under pressure. Bonds are catching a defensive bid, credit spreads are as wide as they’ve been in years, and investors are fleeing to the dollar for safety.

Meanwhile, the classic risk barometer – the AUD/JPY – is breaking to fresh lows.

This all speaks of defensive positioning.

Here’s a daily chart of the AUD/JPY:

Jan Barta of Pale Fire Capital revealed an additional purchase of roughly $23 million in Groupon $GRPN, as he continues to build a position.

The CEO and the president of OPKO Health $OPK revealed a purchase of approximately 400,000 shares of his company's stock in a Form 4 filing.

From the desk of Steven Strazza @Sstrazza and Ian Culley @Ianculley

Credit spreads are widening to their highest levels since late 2020.

If it feels like we just mentioned spreads and the falling HYG/IEI ratio, it’s because we did – and for good reason! They provide valuable insight into the overall health of the market.

High yield bonds $HYG rolling over faster than US Treasuries $IEI implies stress on credit markets and trouble for equities.

This is critical information.

We’ve been closely following the HYG/IEI ratio for months as it repeatedly tests the lower bounds of its range. It broke down to fresh lows in March, only to bounce higher with many risk assets.

Two months later, this crucial risk ratio is printing fresh 52-week lows again. The main difference is that the overall market environment has drastically changed since the last time we were at these levels.