A Major Buy Signal Triggered… [Dirty Dozen]
“This plan, of betting only at a level at which I was emotionally comfortable and not advancing until I was ready, enabled me to play my system with a calm and disciplined accuracy. This lesson from the blackjack tables would prove invaluable throughout my investment lifetime as the stakes grew ever larger.” ~ Edward Thorp
In this week’s Dirty Dozen [CHART PACK] we look at breadth thrusts, new highs, and a MAJOR buy signal… We then look at a contra Ag play, a big FX breakout, and a left for dead tech play that’s on the move, plus more…
1. Our Trifecta Lens indicator (a composite of macro, technical, and sentiment/positioning intermediate data points) fell below the 10% threshold last week triggering a major buy signal.
2. Thrusty action… A Breakaway momentum breadth thrust is within reach today, requiring 1,600+ net advancers. And we nearly got a Zweig thrust last week. A standard Zweig thrust triggers when the 10-day ema of NYSE ADV/ADV+DECL issues moves below 40% and then above 61.5% within a 10-day period. Notice it didn’t quite cross below the 40% level.
3. SentimenTrader shows that this indicator still has signal value when you relax the parameters some to include last week’s thrust. 12 month returns showed a median gain of 15.12% and was positive 91% of the time.
4. The Dow closed at new weekly all-time highs on Friday. This is not bearish.
5. The NYA also closed at new all-time weekly highs. Again, this is a trend we want to be long and adding to.
6. This is AMZN’s CEO on the impact of GenAI assistants within the company’s workflow. Transcript via @TheTranscript_ with highlights by me. Pretty incredible stuff…
7. If the EURUSD can hold its gains this week it’ll mark its strongest monthly close in over 2 years. Plus it’ll put in a monthly breakout bar from a major compression regime (note: we are long).
8. Our Yield Spread Oscillator is at 100% for both 2s and 10s, meaning there’s plenty of fundamental momentum behind this move.
9. December Cotton broke out from its descending wedge last week.
10. Its sentiment, positioning, and relative valuation are at historic lows. We’re looking to get long.
11. ZM saw its first weekly close above its upper Bollinger Band in a long time.
12. This table from Koyfin shows its valuation is cheap relative to history and to peers. The company currently trades at a FCF to EV yield of 12%. I haven’t dug into the fundies at all but will be giving it a look this week.
Thanks for reading.
