Today's number is... six

With only a few days left in November, let’s dive into some S&P 500 December seasonality. 

When looking back over the last six elections, December has shown a positive return. Will this trend continue in 2024?

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what the chart shows:

The green bars indicate a positive return for December in an election year.

The red bars indicate a negative return for December in an election year.

The Takeaway: Stocks often perform well as the year comes to a close, and it wouldn't be surprising if buying pressure continues for the remainder of the year.

Since 1952, the S&P 500 has experienced positive returns in 15 out of the 18 Decembers during an election year.

That’s 83% of the time! - The highest reading of any month.

Zooming in on the past two decades, the last six elections have all resulted in positive returns in December.

On average, December during an...

Today's number is... 0.8

The bears have fumbled the ball once again.

The most recent flare-up of new lows we experienced from the other week has already disappeared, and it appears that they are retreating into hibernation once again, as only 0.8% of S&P 500 stocks are at 1-month lows.

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what the chart shows:

The blue line in the top panel shows the price of the S&P 500 index.

The black line at the bottom represents the percentage of S&P 500 stocks at 1-month lows.

The Takeaway: Over the past two years, we have seen deterioration in the new lows list characterized by lower highs, while the S&P 500 index keeps posting higher highs and higher lows in price. This is exactly what you expect to see during a bull market.

With only 0.8% of S&P 500 stocks hitting 1-month lows, it is virtually impossible to enter a bear market or experience a significant correction without the presence of new...

Today's number is... 11

All 11 S&P 500 sectors are back in an uptrend.

I define an uptrend as when the 50-day moving average is above the 200-day moving average. 

It's a simple and straightforward approach.

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what the chart shows:

The blue line in the top panel shows the price of the S&P 500 index.

The black line at the bottom represents the number of S&P 500 sectors with a 50-day moving average greater than its 200-day moving average.

The Takeaway: In a healthy bull market, both the 50-day and 200-day moving averages typically move in the same direction, with the 50-day moving average positioned above the 200-day moving average.

This week, the energy sector signaled a golden crossover (when the 50-day average crosses above the 200-day average). This development has brought all 11 S&P 500 sectors back into uptrend mode. Signaling a continuation of the healthy participation...

Today's number is... 17

The BofA US High Yield Option-Adjusted Spread is at a 17-year low, a level not seen since before the GFC market crash.

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what it shows:

• The blue line shows the price of the S&P 500 index.
• The black line represents the BofA US High Yield Option Adjusted Spread.

The Takeaway: A rise in high-yield spreads indicates increasing volatility and stress, reflecting a Risk-Off market behavior. Conversely, a decline in high-yield spreads suggests that investors are confident and actively seeking risk, indicating a Risk-On market behavior.

Currently, We are at 17-year lows in this spread. If the bond market isn't experiencing stress, then why should we be concerned? After all, the bond market is one of the largest in the world. If there were real stress in the market, it would likely be reflected in credit.

At this moment, credit spreads are sending a clear message: Relax...

Today's number is... 21

Our US dollar Advance-Decline line just closed at 21-year highs.

Here’s the chart:

(right-click and open image in new tab to zoom in)

Let's break down what it shows:

• The blue line in the top panel shows the price of the US dollar index.
• The black line in the bottom panel represents the US dollar Advance-Decline line, which is comprised of 23 key currency pairs.

The Takeaway: The US dollar has been ripping higher over the past month, and when we look beneath the surface, we see healthy breadth readings and confirmation of strength as our US dollar Advance-Decline line has reached its highest level in 21 years.

Typically, a strengthening US dollar would indicate that risk assets like stocks are facing challenges, given the broad intermarket implications of the US dollar. 

However, it appears that stock market bulls remain unfazed by the strengthening dollar. Perhaps a weaker dollar isn't essential for stocks to continue their rally - at...

Today's number is... 16

On Friday, we saw the S&P 500 closed down 1.3%. This marks the 16th time this year that the index has declined by 1% or more in a single day.

Here's the data:

(right-click and open image in new tab to zoom in)

Let's break down what it shows:

The first column represents the year, while each subsequent column indicates the number of large down days for that year, ranging by declines of 1%, 2%, and 3% or more and total count.

The Takeaway: Although experiencing 16 declines of 1% or more might seem significant, it is actually below the historical average. Since 1950, the average year typically experiences about 25 such declines. During 2024, most of the 16 days with a 1% or more market decline occurred amid a short-term market pullback.

On average, each year tends to have 3 to 4 pullbacks of 5% or more, and in 2024, we have only seen two pullbacks of this size.

Therefore, a similar-sized pullback at this point would be completely normal and wouldn’t be surprising at all.  ...

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.

And it doesn't have to be a Russell component — it can be any US-listed equity. With participation expanding around the globe, we want all those ADRs in our universe.

The same price and liquidity filters are applied. Then, as always, we sort by proximity to new highs in order to...

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 Moderna, Square, and Snap.

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

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month.

Then, we sort the remaining names by their proximity to new 52-week highs.

This leaves us...

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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point during their journey to becoming the market...

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.

Some of the best performers in recent decades – stocks like Priceline, Amazon, Netflix, Salesforce, and myriad others – would have been on this list at some point...

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 Moderna, Square, and Snap.

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

We filter out any laggards that are down -5% or more relative to the S&P 500 over the trailing month.

Then, we sort the remaining names by their proximity to new 52-week highs.

This leaves...

From the desk of Steve Strazza @Sstrazza.

Welcome back to Under the Hood, where we'll cover all the action for the week ended December 8, 2023. 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...