From the Desk of Steve Strazza @Sstrazza

The best short squeezes always start with a burst of momentum.

These moves are often sparked by a headline or news-related catalyst.

The price action in Peloton $PTON yesterday was an excellent example of this dynamic.

After reporting earnings Thursday, Peloton screamed higher and registered its best single-day performance in history.

While the report was nothing extra special, it was the first time the exercise bike maker beat on both the top and bottom line since May 2021.

When sentiment is this sour, sometimes "less bad" is all it takes.

PTON rallied 35% on the heels of the report, and with such a massive short interest, we think it's just getting started.

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

With extreme short-term momentum behind this stock, we think the squeeze is on.

Let's talk about how we're playing it.

Here's another look at the $1.7B fitness technology company:

...

The Equally-weighted S&P500 is on pace to close the week at a new all-time high.

Based on the early trading in U.S. Markets, and the strength we're seeing in equities around the world, this looks like it's going to happen by the end of today.

Think about it like this: Mathematically it cannot be only 7 stocks going up if the Equally-weighted S&P500 is making new all-time highs.

It's just math.

And this really just speaks to the broadening participation across the market.

Just last month we saw the most amount of stocks hitting new 52-week highs that we've seen in years - on both the Nasdaq AND on the NYSE.

We also so the most amount of stocks on the NYSE that were above their 200 day moving average than at any point this entire bull market.

You cannot tell me that things are getting worse, if mathematically things just keep getting better.

And I preface with all this because when you zoom out, these mega-cap leaders are still drivers of this market.

They're just not the only ones.

But Nvidia is an absolute beast. This thing is now valued at $3 Trillion.

From the desk of Steve Strazza @sstrazza

For the first time in my career, I'm buying bonds.

It has less to do with positioning defensively and more to do with making a call on lower interest rates.

But what it really comes down to, more than anything, is the chart pattern.

Bond funds are completing bearish-to-bullish reversals for the first time in years. 

This is the same exact pattern we've gone back to time and again this cycle... and every cycle, really.

Rounding bottoms are some of the most reliable patterns we have as technicians.

And we're seeing them across the board in bond funds right now.

Let's dive in and talk about some of them.

Here's the US Aggregate Bond ETF $AGG: 

This fund holds treasury securities, corporate bonds, mortgage-backed securities, and municipal bonds. It is exactly what it sounds like. A diversified bond fund. It also offers investors a 3.4% yield.

The US Aggregate Bond ETF is pressing against the upper bounds of a multi-year accumulation pattern. With...

From the Desk of Steve Strazza @Sstrazza

We love our bottoms-up scans here at All Star Charts. We tend to get really creative when making new universes as we want to be sure they will deliver us the best opportunities the market has to offer.

However, when it comes to this one, it couldn't be any simpler!

With the goal of finding more bullish setups, we have decided to expand one of our favorite scans and broaden our regular coverage of the largest US stocks.

Welcome to The Junior Hall of Famers.

This scan is composed of the next 150 largest stocks by market cap, those that come after the top 150 and are thus covered by the Hall of Famers universe. Many of these names will someday graduate and join our original Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

There is no need to overcomplicate things. Market cap is a quality filter at the end of the day. It only grows if price is rising. That's good enough for us.

The bottom line is it is a bull market. We want as many vehicles and options to express...

If you're like me and you have a bullish long-term bias towards Bitcoin and other Crypto assets, then you're constantly looking for opportunities to get exposure.

But with equities in the middle of a bull market, we also don't want to be in something that isn't moving.

This is the time to make money. So we want to make sure we're in the things that can make us money NOW, not "one day hopefully in the future..."

Take a look at the price of Bitcoin still working on completing this multi-year base.

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.

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

Welcome to the Short Report.

We...

The question we're asking ourselves today is a big one.

Is the US Dollar breaking down from a multi-year consolidation?

With the dollar rangebound all year, we haven’t experienced a trending currency market. 

When the dollar is trending higher or lower, we have a good idea of the impact it is likely to have on other markets.

However, when it is trendless, the dollar is neither a headwind nor a tailwind for risk assets.

We think that could be changing.

Here's a weekly line chart showing the U.S. Dollar Index making new year-to-date lows:

As you can see, the US dollar bears have taken control and resolved this multi-year consolidation to the downside.

Here's another way to look at it.

The index is trading at the lower bounds of a well-tested range. Notice the flat 200-day moving average, illustrating the sideways nature of the primary trend.

And notice momentum, hitting its lowest level...

We're just one week away from the earnings report for one of the most important companies in the world.

We will be LIVE Streaming the earnings call and trading any opportunities that may come from the volatility after the earnings release.

This Live Trading Stream will be on Wednesday August 28th @ 3:45PM ET. 

We'll be LIVE on the main stage on Stock Market TV before the release of the earnings. Don't forget to ...

I find myself saying this a lot these days....

But again, Mathematically, you cannot have a bear market, or a correction of any kind, without the prices of stocks falling.

And so if we know that, then shouldn't we monitor how many stocks are actually falling in price?

This is just common sense isn't it?

Well, where are the new lows?

They're non-existent...

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 August 16, 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 purchases, unusual...

From the Desk of Ian Culley @IanCulley

It’s good to be a gold bug.

New all-time highs and fresh breakouts are dotting the charts. Buy signals are flashing left and right. And even the laggards – Palladium and Platinum – are refusing to break down. 

Best of all, Gold has a one-track mind: up and to the right!

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