From the Desk of Ian Culley @IanCulley

Failed breakouts and trading ranges dominate the charts.

It’s a mixed-up, messy market environment wherever you look — bonds, stocks, commodities, forex…

US treasuries are a prime example, playing it cool with muted volatility and tight credit spreads while yields climb.

Perhaps the near-term rise in rates makes it difficult to grasp, but the US benchmark yield is actually chopping within a broader corrective phase.

Before we dive into the charts, I want to make two things clear: 

One, I am not an Elliottician or an Elliott Wave specialist on any level. And two, if you give five Elliotticians the same chart, you’re likely to get five different wave counts.

Nevertheless, my journey to earning the CMT designation exposed me to the Elliott Theory, and I find it prudent when examining the US 10-year yield.

So here we go…

Whoa! What a week for pruning the garden!

I closed out eleven positions in five trading days. Unfortunately, many of them were losers. But the good news is all the losers were small (less than 1% of my portfolio capital each). Losers are never fun. But when they’re small, we will survive to trade again.

And the better news is that some of the exits this week represent the harvesting of large open profits. The size of the wins, while fewer in number, more than offset the sting of the losses.

When I’m doing it right, that’s how it’s supposed to work!

Check out my thoughts on the current market environment and the action among open trades in All Star Options in today’s Jam Session:

Stock market volatility is at the highest levels since October.

The majority of stocks are NOT in uptrends.

This market is NOT like it was last year.

In fact, coming into today, the majority of stocks on the NYSE are down for the year. Also 2/3rds of the stocks on the Nasdaq are negative for the year.

Go and count for yourself.

You'll quickly see that the majority of stocks in the Large-cap Nasdaq100 are down this year. Same for the Small-cap Russell2000 Index and the S&P Mid-cap 400.

Different markets call for different strategies.

Here's the $VIX hitting levels this week not seen since Halloween:

In today's Daily Digest, we'll review:

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

Let's dig in!

From the Desk of Steve Strazza and Alfonso Depablos

The most significant insider transaction on today’s list is a Form 4 filing by Farhad A. Nanji, Founder of MFN Partners Management LP.

Nanji reported a purchase of roughly $832,400 in RXO Inc $RXO.

This is the video recording of the April 2024 Mid-month Conference Call.

From the Desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as "a market of stocks."

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions. But there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

But we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

Berkshire Hathaway stock $BRK/B has traded down for eleven of the past thirteen trading days. That's not something you see often.

Call me sentimental, but watching implied volatility in Berkshire options creep up to its highest levels of the year feels like a gift to naked put sellers. So I'm going to take advantage.

In today's Daily Digest, we'll review:

1. No new positions today.
2. Adjustment to IBB position.
3. No exits since the last report.
4. Current status of open campaigns.

Let's dig in!

From the Desk of Steve Strazza and Alfonso Depablos

The only insider transaction on today’s list comes in a 13D filing by the Wellington Management fund Bay Pond Partners.

The hedge fund revealed an initial active stake of 5.01% in Redwood Trust $RWT.

This market is just NOT like it was in 2023.

It's much different.

I've said it right here hundreds of time already.

But today's chart of the day really shows this well, reiterating why it's so important to adapt to changing markets.

Here is the S&P500 with a line plotted below it. This line represents the percentage of stocks in the index that are in longer-term uptrends, but are NOT in short- to intermediate-term uptrends.