From the Desk of Alfonso Depablos @Alfcharts

Banks are considered one of the world's most important industry groups as they provide an excellent overview of the economic environment and overall risk appetite toward markets.

After suffering a deep decline in Q1, prices carved out a tradable low, rebounded, and settled into a well-defined trading range.

However, these laggards continue to be a concern for the financial sector and the broader market as the charts look vulnerable heading into earnings season.

Here we have Money-Center Banks $KBE, Regional Banks $KRE, and Community Banks $QABA, all of which are below their AVWAPS from the May lows:

From the Desk of Steve Strazza and Alfonso Depablos

Today’s Hot Corner is a short one.

The largest insider buy on today’s list comes in a Form 4 filing by David Naemura, CFO of Neogen Corporation $NEOG.

This is the video recording of the October 11, 2023, Hot Corner Insider Weekly Strategy Session.

From the Desk of Steve Strazza @Sstrazza

Welcome to The 2 to 100 Club.

As many of you know, something we've been working on internally is using 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.

Now is the time.

If stocks are going to go, this is when they usually do it.

The Dow Jones Industrial Average is only 9% from making a new all-time high.

So is the S&P500.

And what do I think the catalyst is going to be?

Let me rephrase that....

What do I think the catalyst needs to be?

A weaker US Dollar!

From the Desk of Steve Strazza and Alfonso Depablos

The largest insider buy on today’s list comes in a Form 4 filing by Cormorant Asset Management.

The hedge fund reported a $3.5 million purchase of MoonLake Immunotherapeutics $MLTX stock, increasing its ownership stake to 15.20%.

From the Desk of Kimmy Sokoloff

PPI data for September is coming out at 8:30 a.m. ET.

The market could be a little volatile.

From the Desk of Kimmy Sokoloff

The market had a nice move this morning, and then we pulled in when $SPY moved above the 437 level.

Either this recent move needs a rest and consolidation, or we're pulling in further.

From the Desk of Alfonso Depablos @Alfcharts

As the market has been sending mixed signals since July, we’re seeking information from our risk appetite indicators to try to gauge the next move.

One of our favorite ways to measure risk appetite is to compare the consumer discretionary sector with consumer staples. This tells us whether market participants are positioning themselves defensively, or embracing risk. 

Discretionary stocks include automobiles, retailers, and homebuilders, among other things. Theoretically, we’re talking about products and services consumers buy with their discretionary incomes. 

Meanwhile, staples are what "consumers" will buy regardless of how bad economic conditions get… things like food, toothpaste, cigarettes, etc.

When this ratio points higher, it illustrates a healthy degree of risk-seeking behavior among investors. Alternatively, when it points downwards, it speaks to a defensive tone and typically occurs during bear markets.

From the Desk of Steve Strazza and Alfonso Depablos

With investors and executives scrambling to figure out what the geopolitical events of the weekend mean for their portfolios and companies, all was silent on the insider filings front. 

There were no Form 4s, Form 13s, or political reports that meet our materiality threshold. 

From the Desk of Kimmy Sokoloff

Futures are bright this morning.

I mentioned yesterday that there's potential to 438 on $SPY.

Are you ready for the end of the year squeeze?

Many investors think it's not coming and that the market is going to crash instead.

In fact, CTAs have never been this short. The last few times they were anywhere near this bearish, stocks went on to have some of the greatest rallies in history. I remember them well: