When I was younger I would fight trends a lot. I was that guy regularly betting on mean reversions.

Then over time I realized just how stupid that was.

I was actually a permabear in early 2013. I admit it. It was a great lesson that will help me for the rest of my investing life.

We all have to learn somehow.

But that's the point. We need to learn eventually.

Are you wondering whether it's justifiable for stocks to be doing what they're doing?

We continue to make new all-time highs, which makes perfect sense. More stocks are participating to the upside. More sectors and industry groups are catching a bid. And more countries around the world are breaking out.

And the bond market agrees!

This has never been about a virus or a vaccine. It's been about credit spreads, which are hitting their lowest levels since February.

If stocks were going to fall apart and these permabears were going to be right, for once, then we'd see it in credit.

We're not.

In fact, it's actually the exact opposite:

Last year Sean and I flew out to Tokyo looking for Japanese Candlesticks.

Here's what we found....

Every month we get a fresh batch of Monthly Candlesticks. It only happens 12 times a year.

I promise you guys from the bottom of my heart that there is no other part of my entire process that provides as much value and information as my monthly chart review. Premium Members can access the Chartbook here. Stay tuned as we'll be adding more workbooks of charts this week to the Chartbook section.

In the meantime, my friend Josh Brown and I have been doing these short monthly videos since the summer. They're fun and I like how he pushes back against me sometimes. In other interviews they make it too easy on me. I like these!

This month we talk about the breakout in Biotech, Market-cap rotation into Small-caps, European Stocks performing well and what we're doing about Gold & Bitcoin.

Here's this month's video in full:

From the desk of Steve Strazza @Sstrazza

Welcome to the 2 to 100 Club.

Something we’ve been working on internally this year is using various bottoms-up tools and scans to complement our top-down approach. One way we’re doing this is by identifying stocks as they climb the market-cap ladder from small, to mid, to large, and ultimately to mega-cap status (over $200B).

Once they graduate from small-cap to mid-cap status (over $2B) they come on our radar. Likewise, when they surpass the roughly $30B mark, they roll off our list.

But the scan doesn’t just end there. We only want to look at the strongest growth industries in the market as that is typically where these potential 50-baggers come from.

The latest Under the Hood report is out, and as always, plenty of great ideas for me to sink my teeth into.

This week's report revealed a software name emerging from a pretty impressive base which has some pretty significant upside targets in it's sights.

This is the video recording of our December 1, 2020 Monthly Charts Live Strategy Session

Today a conversation came up about whether Gold is an "investment" but Bitcoin is just "Speculation".

Come on...

Let's be serious. One is a useless rock and the other is an almost useless currency. Both of these are speculations. Both of these can be considered "investments". But the only reason to buy either of these is because you think someone else will pay you more for it in the future.

If you don't think a greater fool will pay you more down the road, there's no reason to own either of them.

On another note, the behavior we're seeing in both of these is eerily similar. Keep in mind, since earlier this year we were bullish on both of them, betting that Bitcoin and Gold would trade much higher. Our targets? The former all-time highs: Gold's 2011 peak and Bitcoin's 2017 peak.

Mission accomplished. Great trades! Since then, they're someone else's problem.

Look at both of these and tell me they're not behaving exactly the same. Granted, on different time horizons, but as they say, "The markets are fractal", meaning that you'll see the same behavior patterns across timeframes.

From the desk of Steve Strazza @Sstrazza and Louis Sykes @haumicharts

At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.

Looking at the past helps put the future into context. In this post, we review the relative strength trends at play and preview some of the things we’re watching in order to profit in the weeks and months ahead.

Last week, we outlined how the market is in a very healthy state of order.

Nothing has changed from that message. We continue to see strong demand for risk assets and healthy rotation down the market-cap scale.

Additionally, market internals and breadth continue to improve beneath the surface, supporting the recent leg higher for stocks, both domestically and abroad.

I'm not sure if you've heard, but stocks as an asset class are in a strong uptrend.

As we mentioned on Saturday, more and more stocks, sectors, and countries are making new highs, not fewer of them.

The most telling chart I came across this weekend has to be The Global Dow Index breaking out of a multi-year base to new all-time highs:

As December gets under way, it’s time to review positions with December options that remain open (haven’t already hit profit targets or been stopped out).

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

As it turns out, we only did five trades in total with December options. Currently, we only have two open positions with December options remaining on the books, and only one of them requires any action. The rest have already hit our profit targets or stop loss levels. In the scoreboard below I denote the date we exited each position.

Here’s the scoreboard:

From the desk of Steve Strazza @Sstrazza.

Welcome to our "Under The Hood" column for the week ending November 27, 2020.

What we do 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.

Whether we're measuring increasing interest based on large institutional purchases, unusual options activity, or simply our proprietary lists of trending tickers... there is a lot of overlap.

The bottom line is there are a million ways to skin this cat. Relying on our entire arsenal of data makes us confident that we're producing the best list each week and gives us more optionality in terms of finding the most favorable trade setups for our clients.