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 May 10, 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.

From the Desk of Ian Culley @IanCulley

I’ve heard JC say it many times: “You guys are the smart money.”

After spending a week with clients at our Portfolio Accelerator and fielding countless reader emails, I completely agree!  

Since gold and silver prices are getting a bit wild, I decided to dive straight into the Gold Rush mailbag today to start a healthy discussion about what might happen next…

From the Desk of Ian Culley @IanCulley

Don’t let a few days of selling pressure fool you.

Despite intense gold, copper, and crude oil pullbacks, many commodity-related assets are flashing buy signals.

For instance…

The Global Carbon ETF $KRBN:

KRBN holds a basket of European and U.S. carbon allowance futures – also known as carbon credits. Companies use these credits to offset the costs of releasing greenhouse gases.

Interestingly, the similarities between the carbon allowances, copper versus gold, and silver versus gold charts are uncanny. All three are violating multi-year downtrend lines, suggesting bullish trend reversals and a risk-on market environment.

We like KRBN long above 35, targeting 56.

That’s it for today. We’ll be back with more next week.

Thanks for reading.

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:

From the Desk of Steve Strazza @Sstrazza

Welcome to The Junior International Hall of Famers.

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-listed international stocks, or ADRs.

This scan is composed of the next 100 largest stocks by market cap, those that come after the top 100 and are thus covered by the International Hall of Famers universe.

Many of these names will someday graduate and join our original International Hall Of Famers list. The idea here is to catch these big trends as early on as possible.

Let's dive right in and check out what these future big boys are up to.

This is our Junior International Hall of Famers list:

Click table to enlarge view

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As most of you know, we use various bottom-up tools and scans to complement our top-down approach.

It's really been working for us!

One way we're doing this is by identifying the strongest growth 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.

From the Desk of Ian Culley @IanCulley

Risk assets are enjoying record-breaking highs.

Dr. Copper, Papa Dow, and international equity indexes such as the FTSE 100 are making the new all-time highs list. And Bitcoin will likely join them as it climbs back above 70,000.

Yet the defiant dollar remains afloat.

Nevertheless, risk-seeking behavior, Emerging Market currencies, and interest rates imply the dollar will eventually sink.

Earlier this month, the US Treasury benchmark interest rate led the US Dollar Index $DXY in violating a year-to-date trendline. 

Here’s the US 10-year yield $TNX overlaid with DXY:

From the Desk of Steve Strazza @Sstrazza

Welcome to The Minor Leaguers.

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 now, a company must have a market cap between $1 and $4B.

From the Desk of Steve Strazza @Sstrazza

Our Hall of Famers list is composed of the 150 largest US-based stocks.

These stocks range from the mega-cap growth behemoths like Apple and Microsoft – with market caps in excess of $2T – to some of the new-age large-cap disruptors such as Uber and Crowdstrike.

It has all the big names and more.

It doesn’t include ADRs or any stock not domiciled in the US. But don’t worry; we developed a separate universe for that. Click here to check it out.

The Hall of Famers is simple.

We take our list of 150 names and then apply our technical filters so the strongest stocks with the most momentum rise to the top.

Let’s dive right in and check out what these big boys are up to.

Here’s this week’s list:

*Click table to enlarge view

From the Desk of Ian Culley @IanCulley

Gold did its part earlier in the spring, paving the way for the rest of the metals space.

Now, silver is posting fresh decade highs, uranium names are triggering buy signals, and Dr. Copper is slicing through overhead supply. 

Plus, increasing copper demand has caught the smart money offside.

Check out copper futures with the Commitment of Traders profile in the lower pane:

Fading commercial (smart money) positioning tends to produce pain. 

But even the strongest hands can find themselves on the wrong side of a trade. It happened to commercial hedgers back in 2020, and it’s happening again today.

From the Desk of Ian Culley @IanCulley

Rates are rolling over… 

And bonds are catching a bid.

After four months of steady selling pressure, US Treasuries are finally carving out a tradeable low.

Let’s take a look!

Regardless of duration, the following bond charts present an identical tactical approach.

Two key themes dominate these trade setups: entry points designated by price reclaiming the February 2024 lows and initial targets set at the December 2023 highs.

Of course, there’s always an exception…

Check out the US 30-year T-bond futures:

Like the following charts, we can measure our risk at a key pivot low from late February.

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.