There are thousands of stocks, hundreds of ETFs, and an endless amount of news, opinions, analyst targets, economic data and social media noise telling you what you’re supposed to care about.

Most of it doesn’t matter.

The Trading Initiative is focused on trying to answer a much smaller set of questions: Where is capital going? Which areas of the market are benefiting from it? Which securities are acting like leaders? Where can we enter with defined risk and asymmetric upside?

And maybe most importantly: Could this be the beginning of something much bigger?

Because we’re not trying to dink and dunk our way through the market. We’re looking for the handful of trades each year that can actually move a portfolio.

So far in 2026, we’ve found them in XOM and INTC. In 2025, it was SLV, MU and CRWV. Before that, GLD etc.

They were different trades in different markets, but the objective was the same: get positioned early in a major trend, control the downside while the trade proves itself, and then stay with the winner long enough for it to matter.

Everything we do at TTI comes back to that process.

These are the 12 rules behind it.

Rule 1: We follow the money.

Markets move because capital moves.

Prices don’t go up because a company has a good story. They go up because demand exceeds supply. When large amounts of money start moving into an asset class, sector, industry or individual security, it leaves evidence behind in price, relative strength, momentum, volume, breadth and leadership.

That’s why capital flows and liquidity are at the center of what we do.

We’re much less interested in asking, “What looks cheap?” than we are in asking, “Where is capital already proving that it wants to be?”

Price follows capital.

Rule 2: Start at the top with the Market Blueprint.

Before we start looking for individual stocks, we want to understand the environment they’re trading in.

Our Market Blueprint process is top-down:

Market → Sector → Industry → Stock.

A great stock can struggle when its sector is under distribution. An average setup can become a monster when huge amounts of capital are pouring into its industry.

So we start by asking what the market is rewarding right now. We look at the broad market, then the sectors, then the industries inside those sectors, and finally the individual securities receiving the strongest sponsorship.

We’re not trying to predict every move in the S&P 500. We’re trying to understand the direction of the current.

By the time we get down to the individual stock, the market has already done a lot of the filtering for us.

Rule 3: Attack the market from the bottom up too.

Top-down analysis tells us where we should be looking. Our Hit List process is what finds the best stocks to trade for huge wins in those areas.

We’re scanning the market for securities showing the characteristics we care about most: strong trends, exceptional relative strength, persistent momentum, constructive price action and clearly defined risk.

Sometimes our Market Blueprint framework tells us capital is moving into a particular area and we need to find the best vehicle.

Other times an individual stock starts acting unusually well before the larger story becomes obvious.

When both approaches lead us to the same place, that’s where things can get especially interesting.

Either way, price earns our attention first. The story comes second.

Rule 4: Every trading vehicle must pass the Three Golden Rules.

We can look at dozens of indicators, but three things matter more to us than everything else:

Trend. Relative strength. Momentum.

Trend tells us whether price is moving in the direction we want to trade.

Relative strength tells us whether the stock is outperforming the market, its sector, its industry and the other opportunities competing for our capital.

Momentum tells us whether there is enough force behind the move for it to continue.

We want leaders. Not former leaders. Not laggards that look cheap. Not stocks we hope might become leaders someday. The leaders.

Fundamentals, catalysts, valuation and sentiment can all matter. But if a trading vehicle fails these three tests, it usually doesn’t belong in our portfolio.

Rule 5: Strength is information.

People naturally like bargains. If something was $100 and now costs $60, it feels cheaper.

Markets don’t necessarily work that way.

A stock falling 40% isn’t automatically 40% more attractive. Sometimes the decline is the information. A stock making new highs isn’t automatically too expensive either. Sometimes the new high is the information.

Large institutions can’t always build meaningful positions in a day. They accumulate over weeks or months, and that repeated demand can create persistent trends.

Those are exactly the trends we’re trying to find.

The biggest winners rarely feel comfortable early. They’ve already moved. They look expensive. Someone will tell you that you missed them.

And then sometimes they double or triple again.

Our job isn’t to decide that something has gone up “too much.” It’s to determine whether the behavior that made it a leader is still intact.

Rule 6: We don’t buy ideas. We buy setups.

A good company isn’t automatically a good trade. Neither is a great story, a strong theme, or even a stock that passes our Three Golden Rules.

Price still has to give us an opportunity.

Before we enter a trade, we need three things: an entry, an invalidation level and favorable reward-to-risk.

Without those, there is no trade.

Sometimes that’s a breakout. Sometimes it’s a pullback, reclaim or continuation setup. Sometimes the right move is simply waiting.

We would rather miss a move than manufacture an entry because we’re afraid of missing out. There will always be another trade.

Rule 7: We demand at least 3:1 reward-to-risk.

Before we enter, we want at least three dollars of potential upside for every dollar we’re prepared to lose.

That matters because you don’t need to be right all the time to make money. At exactly 3:1 reward-to-risk, the mathematical break-even win rate before costs is only 25%.

The goal isn’t to be right as often as possible. The goal is to make substantially more when we’re right than we lose when we’re wrong.

But 3R is only the hurdle for getting into the trade. It isn’t our profit target.

If a trade reaches 3R and everything that got us into it is still intact, we’re not selling just because a spreadsheet says we’ve made enough money.

Sometimes 3R becomes 5R. Sometimes 8R. Sometimes 10R or more.

The 3:1 test tells us whether a trade is worth taking. It doesn’t tell us how big we’re allowed to win.

Rule 8: We’re hunting grand slams, not singles.

This is one of the biggest differences between how we approach markets and how a lot of traders do.

We’re not trying to manufacture a tiny gain every day. We’re hunting massive trends.

The ideal trade starts with clearly defined risk. Then it begins working. The trend strengthens, relative strength expands, momentum persists and capital continues flowing into the trade.

At some point, the job changes from finding a profitable trade to something much simpler:

Don’t screw up the big one.

Most trades won’t become portfolio-moving winners. That’s fine. Some will lose. Some will go nowhere. Some good setups simply won’t develop.

Then every once in a while, you catch one genuine monster and the math changes.

That’s why our system isn’t only designed to protect us from losses. It’s also designed to keep us aboard when we’ve caught something special.

Rule 9: Define the downside and give the upside room.

Every trade begins with invalidation.

Before asking how much we can make, we want to know what price action would prove that the trade is no longer working.

That determines our risk, and our risk determines the position size. Not the other way around.

We don’t buy first and figure out the risk later. That’s how stops get moved, theses get rewritten and manageable losses turn into portfolio problems.

If the reason we entered disappears, we move on.

The opposite matters too. When a position keeps proving us right, we don’t want to manufacture reasons to get out simply because we’re sitting on a big gain.

We may raise stops, trail support, trim extreme extensions, reduce around binary risk or simply leave the position alone.

There are two expensive mistakes in trading: letting a loser become too large and never allowing a winner to become large enough.

Our process is designed to avoid both.

Rule 10: We’re here to teach you how to trade, not spoon feed you signals.

There is a big difference between following someone’s trades and actually learning how to trade.

TTI is built around the second one.

If all we’ve taught you is to sit around waiting for us to say “buy” and “sell,” then we haven’t done our job.

We want you to understand why a trade exists. Why that sector, why that industry, why that stock, why now, why that entry, why that invalidation level, why we’re holding and eventually why we’re exiting.

But there is also a reality to learning markets: the best way to learn is to do.

That’s why we encourage members to follow our trades live. Not because we want you dependent on us, but because it lets you experience the entire lifecycle of a trade firsthand.

You see the setup before it triggers. You see the entry and know exactly where we’re wrong. You watch how we handle normal volatility, how we manage risk and what we do when the trade either works or doesn’t.

And every once in a while, you get to watch an ordinary setup turn into one of those portfolio moving winners.

Our goal is to turn the live trade into a classroom.

The goal is to learn the framework, watch it being applied in real time, and eventually be able to do it yourself.

The TTI Philosophy

If I had to reduce everything we do to one sentence, it would be this:

Follow the capital, trade the leaders, define the downside, and give the biggest winners enough room to meaningfully impact your portfolio.

You don’t need to predict every market move. You don’t need to own every winner. You don’t need to be right every time.

And you definitely don’t need to spend your time in the market collecting tiny wins.

You need a repeatable process for finding asymmetric opportunities, the discipline to keep losses small when you’re wrong, and the patience to let exceptional winners become exceptional.

Most trades won’t become grand slams.

That’s fine.

We’re looking for the few that do.

And along the way, we’re teaching our members how to find them, trade them, manage them and eventually do it themselves.

That’s what we teach. That’s what we trade. And that’s what runs The Trading Initiative.

What You Get When You Join TTI

When you join The Trading Initiative, you’re not just getting a newsletter or access to a list of trade alerts. You’re getting the entire process we just described, applied to the market in real time.

The Trade Desk, our proprietary market dashboard, is the center of it. That’s where our clients track the opportunities we’re watching, the trades we’re taking, our entries, invalidation levels, position management and the changes that matter as the market develops.

You also get our market and opportunity research, where we break down what we’re seeing across the market, where capital is moving and where we think the best opportunities are developing.

Our nightly Desk Notes keep you updated as conditions change, without making you sort through hours of market noise to figure out what actually matters.

Members also get three live coaching sessions throughout the week, where we go deeper into the setups, trades and decision-making behind the process, plus access to the education inside TTI so you can actually learn the framework instead of blindly copying it.

And then there’s the private Discord, where you can follow us during the trading day, see the process unfold in real time and be around other traders working through the same market.

The idea is to connect everything.

You see the research that leads us toward an opportunity. You see the setup develop in the Trade Desk. You see what we’re doing when the trade triggers. You follow the management as it develops. You see the final result. And through the coaching and education, you learn why we made those decisions in the first place.

That’s the point of TTI.

We want to help you find better trades today while teaching you how to become a better trader tomorrow.

That’s what you get when you join.

If you’re ready to learn how to trade the markets using an evidence-based system that combines top-down research with bottom-up precision, the signup is here:

Join TTI Today

PS. If you become a paying member of the Profits Over Prophets newsletter for $10/mo, there is a special discount to join our full-service. I encourage you to try before you buy!

Educational content only. Nothing published by The Trading Initiative constitutes investment advice, financial advice, or a recommendation to buy or sell any security. Any levels referenced—including entries, stops, targets, or invalidation levels—are provided for educational and analytical purposes only and do not take into account any individual’s financial situation, objectives, or risk tolerance. The Trading Initiative, its team, and its contributors may hold positions in securities discussed, as well as positions not mentioned, and may enter, adjust, or exit those positions at any time. Trading and investing involve substantial risk of loss. Past performance is not indicative of future results. Always conduct your own research and make your own financial decisions. © The Trading Initiative. All rights reserved.

My top-down process is called the Market Blueprint framework.. and it focuses on building the bigger picture first.

• Which direction are the major indexes trading?

• How is market breadth holding up?

• Which sectors, industries, narratives and themes are leading?

• How are financial conditions: restrictive or accomodative?

• Are the largest financial institutions buying, selling, or waiting?

It seems complicated. And maybe it is. But after doing it for so long.. it’s like shooting your 10,000th free throw. It’s just automatic.

Here’s what step 1 (of 7) looked like tonight:

Only once I know what I am trying to do in the market.. buy, sell, wait, etc so I move onto finding the right trading vehicle.. the right stock.. to express that view.

And that’s what this article is going to focus on: my bottom-up process which I call my Hit List framework.

Three things matter to me more than anything when it comes to the actual stock I am trading:

• It has to be trading in the direction of the primary trend.

• It has to be showing relative strength against the market, its sector and industry, and a basket of its peers.

• It has to be accelerating rapidly.

Let’s get into each.

The trend is the most important part of any trade.

I don’t care if you trade with it or trade against it — you need to know which way price prefers to be moving.

For me.. I’ve been trading for 17 years. I have traded every style you can imagine. And nothing comes close in terms of profitability than simply trading alongside the direction of the trend.

So that’s where I start. If the Market Blueprint framework told me that I need to be buying because the market is in a primary uptrend and has supportive evidence that higher prices are coming.. I look for stocks that are trending higher.

Here’s how I do it.

Price must be..

• Above an upwards sloping 20-day moving average.

• Above an upwards sloping 50-day moving average.

• Above an upwards sloping 200-day moving average.

Mind blowing stuff, right?

I’m looking for all three moving averages, which represent the short, intermediate and long-term trend of the stock, underneath the price of the stock and sloped upwards.

The slope part is important. I know you probably thought you wouldn’t ever have to use slope again after 8th grade but here it is showing up.. and it’s absolutely paramount to your long-term success.

Upwards sloping moving averages convey an extra degree of confidence that the trend will continue higher. And vice versa — downward sloping moving averages will be more durable to the downside.

You have to start with trends when buying the strongest stocks in the market.

The second thing that matters to me is relative strength. And I don’t mean the RSI indicator.

I’m talking about the concept that whatever stock you’re looking at is showing leadership qualities.

How can you do that? Simple. Compare the performance of the asset you are looking at trading with the performance of every other asset you could be trading.

Here’s how I do it:

• The stock I am looking at must be outperforming the broader market.

• The stock I am looking at must be outperforming its sector.

• The stock I am looking at must be outperforming its industry.

• The stock I am looking at must be outperforming (a majority of) the top 5 stocks within the same basket of stocks.

This is tricky because most stocks will fail this test. And that’s a good thing.

You don’t want a bunch of stocks all showing incredible relative strength. You want THE BEST stock that’s showing relative strength.

“If you want to outperform the market, you need to own the things that are outperforming the market.”

Remember that forever.

The last thing I am looking for is momentum in the stock.

It does me no good to find a stock that is in a primary uptrend, showing leadership qualities, but is slowing down in its advance higher.

Simply put.. you need to find the fastest horse in the race. And then bet the farm on it.

Here’s how I do it:

• The stock must be trading in a bullish momentum regime, defined by the RSI.

• The stock must be accelerating higher with momentum increasing, defined by the MACD.

Think about it like this..

You don’t want to race the Lamborghini if the tanks on E. Doesn’t matter how cool it looks. It still needs to move and you still need to win the race.

Once you establish all three of those things.. you move onto setting up the actual trade.

Let’s walk through one I’m in right now: RingCentral (RNG).

The members inside of TTI bought RNG back in late July as it broke out above the 46.50 area. It’s since moved over 70% in our favor for a big win. Let’s talk through the chart setup.

RNG had traded in a massive range for over 3 years before breaking out. These massive bases are oftentimes referred to as accumulation zones (Wyckoff) or Stage-1 bases (Weinstein).

Regardless of what you call them — once they break out, the extended move is likely higher for a significant amount of time and offer an easily defined entry point.

All three moving averages (20, 50, and 200) were underneath price while sloping upwards. I refer to those as stacked.

RNG had also showed up on our Emerging Leaders scan — a scan inside of our TTI Trade Desk that surfaces stocks beginning to show leadership qualities before the crowd catches on.

Here’s a portion of what our Emerging Leaders scan looks like tonight:

We took a second look at RNG after we scanned through it live during our Execution Report webinar. RNG is a software stock, so we compared it against the tech sector (XLK) and the software industry (IGV).

In both instances, we saw that RNG was leading both higher. That’s the kind of relative strength we want to see when entering a trade.

Lastly.. we checked the momentum factor. Was RNG accelerating into the breakout point? Or was there a strong chance of a failed breakout?

RNG had officially entered a bullish momentum regime when the RSI hit overbought territory back in February.. and has remained within that bullish momentum regime the entire time.

And the MACD was crossing over and signaling that the move in momentum was just starting. We knew that bulls had control of this primary trend higher. And because we knew what we were looking for.. we were able to capitalize on it.

Here’s a tweet I sent out back in late July highlighting the setup:

We’ve since added into the trade at 62.50, sold options contracts worth over 100%, and more. This one trade has paid us out for nearly 2 months now. And there is no signs of it stopping anytime soon.

Here’s a piece of what our stock card says about RNG:

It’s easy to highlight the wins. What’s hard is turning the process that found the trade into a repeatable system that can be replicated over and over and over.. putting yourself in front of the best possible trades at all times.

Not all of them are going to work. And that’s OK. The one’s that do will pay for the ones that don’t 10x over time. The goal is to give yourself the best possible odds to smack those grand slams. And the Hit List framework is there to do just that.

Trading strategies and systems come and go. But trend, relative strength and momentum are core concepts that have stood the test of time. I encourage you to incorporate them into your trading. I guarantee you will have better results.

If you’d like to learn the Hit List framework (and our Market Blueprint framework) live with us, join TTI today. We host 3 webinars per week, host live trading every day, and you’ll have access to our Trade Desk software.. filled with our proprietary scanners, trade ideas, and more.

If you’re serious about learning how to do this.. join our community. You won’t be spoon feed signals. Although it never hurts to make a couple bucks trading what we’re trading while you learn how to do this yourself.

Join TTI Today

Thanks for taking the time to read. Let me know in the comments what you think about our Hit List framework. As well as anything else you think would be of value for me to write about.

Prepared for you by Randy Dunham

September 25, 2026

THE PRINT

Midterm years have historically seen a September-October dip before turning higher into year-end.

THE CHART(S) / DATA

Going back to 1950, the S&P 500 has followed a fairly consistent pattern during midterm years.

The average and median paths tend to weaken from late September into early October. From there, the market has historically moved higher into the elections and through year-end.

This pattern also holds up across both halves of the sample (split 1 = 1950–1986, split 2 = 1990–2022):

Takeaway: The historical setup points to a period of weakness from late September into early October, followed by a stronger stretch into and after the midterm elections. Keep in mind, midterm elections fall on November 3 this year.

THE TAPE

THE HIGHS AND LOWS

SPREAD THE WORD!

CHECK OUT OUR TWITTER AND YOUTUBE TOO!

Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.

I’ll walk through who I am, how I trade, and how TTI fits into all of this. Then we’ll chart some tickers live. Bring your questions and a few names you want to look at — I want to get to know you guys while giving you as much value as I can.

Our Market Blueprint framework still does not show a confirmed primary downtrend, but participation has materially weakened over the past five trading sessions.

Those two things can be true at the same time. SPY and QQQ remain in confirmed advances, while the broader Market Desk read is an unconfirmed advance. Our current posture is Participate selectively.

But look underneath those index charts. From the September 17 close to the September 24 close, the share of stocks above their 50-day average fell from 29.45% to 23.89%. The share above the 200-day fell from 47.17% to 41.93%. Meanwhile, the number making 63-session closing lows rose from 82 to 212.

That is materially weaker intermediate- and longer-term participation over five trading sessions. It isn’t deterioration in every measure: short-term participation improved, credit is confirming, and our posture has moved back from Reduce aggression to Participate selectively. I still want to know which individual stocks could fail if the weakness continues.

This is why I start with the Market Desk. The Market Blueprint framework helps me separate the primary trend from the conditions underneath it, then decide how aggressively I want to trade. A weaker environment changes the decisions I make before every index chart has broken down.

Tonight, that means doing some preparation on the bearish side. If a stock loses support, I want to have already worked through the chart, the invalidation, and the room below it. Waiting until a big red candle gets everyone’s attention can leave you trying to build a plan after the entry has passed. That’s the work I want us doing inside TTI Membership. We can keep looking for strength while also knowing where weakness could become actionable. There’s no need to force the whole market into one opinion.

Tonight’s Breakdown Ready scan found 17 candidates across six sectors. The median TTI Score is 29, the highest is 40, and none scored 85 or higher. This is a bearish setup list, so the low scores describe weak bullish technical alignment. They aren’t bearish win probabilities, and the first row isn’t automatically the best short.

Read more

Prepared for you by Randy Dunham

September 24, 2026

THE PRINT

Less than 50% of stocks in the S&P 500 are trading above their 200-day moving average. So far this cycle, that’s been a bullish thing.

THE CHART(S) / DATA

Less than 50% of stocks in the S&P 500 are trading above their 200-day moving average.

The 200-day SMA is widely used as a long-term trend gauge. So another way to read this is that less than 50% of stocks are in an uptrend.

Two points on this:

• Since 2023, the majority of stocks have been above their 200-day SMA, more specifically, about 80% of the time. That makes these periods of weakness fairly rare.

• More importantly, since 2023, instances where less than 50% of stocks are above their 200-day SMA have tended to mark decent buying points.

Below is a look at S&P 500 performance after the first cross below 50% since 2023. Signals are de-clustered by 20 trading days:

Three points on this:

• The average and median S&P 500 return is positive across every time horizon.

• The hit rate is above 50% across every time horizon.

• The 3- and 6-month hit rates are especially strong at 95% and 100%.

Takeaway: Although it doesn’t sound bullish, the data has shown that a cross below 50% has been more useful as a buying signal than a reason to sell. There have been exceptions like Q3 2023 and Q1 2025 — both saw further selling after the signal. But overall, the data has favored positive S&P 500 returns over the following 1 week to 6 months.

THE TAPE

THE HIGHS AND LOWS

SPREAD THE WORD!

CHECK OUT OUR TWITTER AND YOUTUBE TOO!

Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.

We’ll cover who I am, how I trade, how TTI fits into all of this, and then we’ll pull up some tickers and work through the charts live.

I want to get to know more of you here on Substack and give you a chance to get to know me too. My goal is to make the time as useful as I can, so you leave with something you can actually apply to your own trading.

The next stock you wish you owned probably won’t wait for you to get tired of watching the last winner.

This is why I keep looking. Even when I like the positions I already have.

There’s rotation going on underneath the market. You can spend the entire day arguing about what the indexes should do and miss the individual stocks starting to behave differently. A stronger trend. Better relative performance. Momentum picking up in a name you haven’t looked at in months.

That’s where I want my attention.

Our Emerging Leaders scan helps me find those names and bring them into the research process. The idea is to have a stock on my screen, understand its structure and know what I need to see before it becomes the chart everyone is passing around.

By then, the easy conversation is usually “look how much it’s up.” I’d rather have done the work before that conversation starts.

And I use this scan in two ways.

For a Flow trade, I’m looking for developing strength that can become durable leadership. I want to see the trend hold up, relative strength persist and, where it’s available, the group support the stock. That’s the research path toward a position I may stay with for weeks or months.

For a Burst trade, I’m looking for the shorter move: a defined level, participation when it clears, and follow-through soon after entry. A stock doesn’t have to become the next great market leader to give me a useful trade over a handful of sessions.

The same watchlist can feed both. What changes is the setup I’m willing to take, the risk I’m accepting and what I expect the stock to do once I’m in.

“Emerging” also doesn’t mean nobody has found it, or that it hasn’t already moved. Some of tonight’s names have moved a lot. The advantage I’m looking for is being prepared for the next opportunity instead of discovering the stock after I’ve started chasing it.

This is part of the work we do inside TTI Membership: keep looking for where leadership is developing, then connect the idea to an actual trade plan.

Tonight’s scan gives us seven names to work through. Here’s where I’d start.

Read more

Prepared for you by Randy Dunham

September 23, 2026

THE PRINT

The 100-day relative return spread between semiconductors and the S&P 500 is back to its long-term average.

THE CHART(S) / DATA

The chart above shows the trailing 100-day relative return spread between semiconductors (SMH) and the S&P 500 (SPY) from 2006 to today.

Three points on this:

• Over a 100-day period, semiconductors have historically outperformed the S&P 500 by 3.9% on average.

• Since 2006, the spread has reached 3 standard deviations above its average twice (Q2 2024 & Q2 2026).

• Over the last 100 days, the spread has fallen back to its long-term average.

This makes the recent strength in the semiconductor ratio look interesting:

Although the ratio peaked in June, it has since found a local bottom and is now making new 50-day highs.

Takeaway: The recent pullback in semiconductors gave the group a chance to reset. On an intermediate-term time horizon (100 days), the recent outperformance in semiconductors may have more room to run.

THE TAPE

THE HIGHS AND LOWS

SPREAD THE WORD!

CHECK OUT OUR TWITTER AND YOUTUBE TOO!

Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.

We spend a lot of time looking for that first breakout. The level clears, the trade starts working, and suddenly everyone wants to know whether they missed it. But a few weeks later, when the same stock pulls back.. the conversation changes. Now people want to know what’s wrong with it.

Sometimes something is wrong. Sometimes a strong stock is just digesting a strong move.

My job is to work out which one I’m looking at before putting more money into it.

That’s the purpose of our Pullback Confirmed scan. It looks for stocks with prior leadership, a longer-term trend that’s still intact, and a pullback toward support. Then it asks for evidence that price is starting to turn higher again.

I want the stock to do some of the work first. Reclaim the previous day’s high. Finish the session toward the top of its range. Give me something I can build a trade around, with a clear place where the idea stops making sense.

NEM is a good example, because it’s a position we’re already involved in.

We opened the Newmont January 15, 2027 $125 calls on August 5 at a stated entry of $5.90. The plan from the beginning was to sell half at twice our entry price. By August 12, we sold have at the double and kept the remaining half on.

That first sale recovered the original premium. The remaining calls still had value at risk, but we had given ourselves room to stay with the larger idea without leaving the entire original position on.

I walked through the theme, the entry and those early management decisions in The Anatomy of a Winning Trade. If you haven’t read it, it’s worth seeing how we built and managed the trade from the beginning.

Member tray’s screenshot from the August 25 case study, showing the January 15, 2027 $125 calls.

Now fast-forward to tonight. NEM is up about 30.1% over three months but down 3.3% over the last month. It’s back on the list for a different reason: a pullback followed by a reversal near support.

Its Trend and Relative Strength scores are both 93, while Momentum is 52. That combination matters. The longer-term strength is still there, even though short-term momentum has cooled. Today it closed above the prior day’s high and toward the top of its range.

That’s the kind of behavior I’m looking for when a leader has had time to digest its initial move and may be ready for another leg higher.

It doesn’t mean I automatically add to the calls we already own. Managing an existing position and opening a new one are two different decisions. A fresh entry still needs a price, an invalidation level and enough room to make the risk worthwhile.

But owning a position in a name that’s beginning to pull away again is always a good thing. We have the opportunity to buy more without adding additional risk into the original trade. And the original trade has months to go before we are forced to close.. opening the door for a big win.

This is the work we do inside TTI Membership: follow the stock beyond the first exciting day, understand what’s changing, and build the next decision from the chart in front of us.

Tonight, six stocks meet the Pullback Confirmed condition. Here’s what I’m paying attention to in the report.

Read more

Prepared for you by Randy Dunham

September 22, 2026

THE PRINT

The Magnificent 7 made new all-time highs.

THE CHART(S) / DATA

The Mag 7 gained 75% in the seven months following the April 2025 selloff, then spent the next 10 months going sideways.

Now, the group has broken out to all-time highs.

Strength in these stocks has a meaningful impact on the broader index, as they make up roughly a third of the S&P 500.

• Google (GOOGL): 5.9%

• Amazon (AMZN): 4.0%

• Apple (AAPL): 6.6%

• Meta Platforms (META): 2.2%

• Microsoft (MSFT): 5.3%

• Nvidia (NVDA): 7.9%

• Tesla (TSLA): 2.0%

Apple has been the strongest member of the group this year, with Nvidia trailing closely behind.

Tesla is the only one trading lower on the year.

Takeaway: The Mag 7 just broke out of a 10-month consolidation. Because these stocks are among the largest in the S&P 500, a sustained breakout would provide another source of strength for the broader index.

THE TAPE

THE HIGHS AND LOWS

SPREAD THE WORD!

CHECK OUT OUR TWITTER AND YOUTUBE TOO!

Material, data, and information in this newsletter are for informational purposes only. This is not tax, legal, or investment advice, and does not constitute a suggestion, solicitation, or offer to buy or sell securities. TTI believes this information is reliable but does not warrant its completeness or accuracy.

On Thursday I published When It’s Time to Buy, Nobody Will Want To.

Today the S&P 500 rallied about 1.5% and the Nasdaq gained 2.3%. Intel, one of the stocks I walked through and bought in that article, finished more than 12% higher on the day.

To everyone who took a planned entry alongside us last week.. congratulations. It takes something to put money to work when the reasons to stay away still sound convincing.

And they sounded pretty convincing. Geopolitical headlines. Oil. Higher rates. A market that had been pulling back. Waiting for everything to settle down was an easy decision to defend.

The AAII survey for September 16 had 53.3% bearish against just 28.8% bullish. That doesn’t tell us exactly how everyone was positioned, but it does show how negative the mood had become.

That’s how you get caught leaning the wrong way: you keep responding to the reasons the market fell while the stocks you want to own have already started responding differently.

Last week, the data gave me a reason to start buying. Sentiment had deteriorated, selling was accomplishing less, and individual stocks were breaking out. So we bought. The INTC, SPCX and more decisions are there in the original article, dated before today’s rally.

Today is encouraging. I’m happy we were doing the work then. Now I want to keep doing it, because the next entry has to make sense at the next price.

Tonight’s scan gives us 55 Established Leaders across nine sectors. The median TTI Score is 85, with 31 names at 85 or higher and a top score of 98.

Technology and healthcare account for 39 of the 55. There’s a lot to work through without treating every green candle as something we need to own.

If you want to follow the preparation, entries and decisions as they develop, join TTI Membership here.

Here’s the daily snapshot of our Daily Action Report:

Read more

Think of it like gas to a car. It’s that important.

I’m constantly asking myself.. is liquidity entering? Is it leaving? And how is price responding to either condition?

There are varying metrics in the tradfi markets to track liquidity.. the Fed, banking metrics, ETF flows, etc.

But in crypto.. it’s a lot more simple. You can track the entire market cap of the crypto market by using a single ticker.

The chart I want to start with today is TOTAL.

If you haven’t used it before, this is TradingView’s total crypto market cap chart. It gives me a view of the asset class before I start scanning through Bitcoin, Ethereum, or something more speculative.

And right now, it’s trying to break higher.. along with Bitcoin.

This is the same process we’ve been working through with stocks.

Start with the bigger picture, find where strength is developing, then work down to the individual setup.

There is one catch with TOTAL though.. Bitcoin may be the most important component of the crypto ecosystem but Ethereum also plays a big role (along with stablecoins). The whole chart can move higher without the average shitcoin doing particularly well.

For that, I checked TOTAL3.. which removes Bitcoin, Ethereum, and stablecoins.

That chart is challenging the upper end of its recent range too. The strength we’ve seen in crypto is falling down into the most volatile and speculative assets in the crypto space.

That gives me more to work with. It doesn’t mean every shitcoin is participating.. but this move reaches beyond Bitcoin.

I think this is where crypto gets useful even if you spend most of your time trading stocks.

People talk about liquidity like there’s one number we can pull up that tells us how aggressive to be. I’d love for it to be that easy.. in practice I’m looking at several things that answer different questions.

Rates and financial conditions tell me about the backdrop. Prices show me what traders are willing to pay. Fund flows help me check whether a particular trading vehicle is actually attracting new capital or not.

Those things can diverge for a while.

But the way I learned it is “liquidity leaves footprints.”

I’m looking for strength that starts showing up in more places. Especially further out on the risk curve.

And the backdrop is as good of a reason as any to start looking at crypto. The Fed just raised its target range by 25bps and the US 10-year was over 5%. There’s a million reasons why crypto should not be working right now..

And yet the charts are improving. Money is flowing in. And prices are heading higher.

I pay attention when that happens.

Bitcoin and IBIT still have a level to clear

Bitcoin is back above $80,000 as I write this.

It’s trading above its anchored VWAP from its all-time highs. Momentum is accelerating higher. And it’s working on breaking out of a multi-week consolidation fractal.

IBIT is my preferred way to trade Bitcoin through my brokerage account. It even has (very) liquid options. And it’s breaking out alongside the Bitcoin chart.

Here it is also trading above its anchored VWAP from its all-time highs.

This is where entry mechanics matter.. a lot.

If I’m trading a horizontal breakout, I want price to clear the level with participation.. and I need a place where the trade is wrong. Then I can work out whether the distance to that point makes sense to trade. The reward-to-risk has to be high enough for me to commit capital.

If I have to put my stop way down at the bottom of the range to make the chart look safe, the position gets smaller. Sometimes the better decision is to wait for a tighter setup. But today is not that day.

I’m a big believer that ETF flows are an integral part of today’s markets. More and more passive (and active) buyers show up in ETFs.. which directly put buying pressure onto the stocks inside. So I naturally checked the ETF flows for Bitcoin.

Inflows. Across the board. And yet no one is talking about it.

When IBIT is getting bought and price is breaking out and no one is talking about it.. I want in.

And I am.

I’ve already sold half of my position to turn the trade-risk free and take some profit. The rest of the position can continue to ride higher as long as the trend continues to pay me.

This is what makes TTI special. Understanding how to manage risk into big wins. No one talk about this.

Join TTI.. and learn and earn.

Ethereum gives me another piece of the picture

Ethereum is where it gets really fun. Trading above its range high within increasing momentum, Ethereum actually gives me a cleaner trading vehicle than Bitcoin does.

What I like is that Ethereum has also gained ground against Bitcoin over the past month. The ETHBTC chart is breaking out once again against Bitcoin.

Last cycle Ethereum outperformed Bitcoin by over 400%. Yes — you read that right.

Bitcoin go the headlines near $70,000. But traders who owned Ethereum completely crushed traders who only owned Bitcoin. And it’s happening again.

ETH has outperformed BTC by 77% since April 2025. And 22% from just three months ago. That’s what I mean when I talk about opportunity cost. Very few traders talk about it because very few traders actually trade. They spend all their time writing Substack articles. :)

ETHA is my vector of attack here. More volatile than IBIT and a very liquid options chain.

So naturally I am in.

What I’m watching from here

TOTAL is the first chart I want to see hold up. A close above the recent range, followed by buyers defending that area, would allow me to add more size into the trade.

Then I want to see IBIT and ETHA get through their own resistance, with the shitcoin market continuing to participate. Repeated positive ETF flows would add confidence too.

Remember.. my Bitcoin trade is already risk-free (I sold the double at over 100% in profit). My Ethereum trade is still fully risked.

That combination would make me more interested in putting more capital to work in the crypto space.

It still wouldn’t tell me to increase risk across every stock I own. I’d run it alongside market direction, participation, sector rotation, and financial conditions, just as we do in the Market Blueprint.

Join TTI.. and learn and earn.

If you want to work through that process with us, TTI Membership is where we connect the market context to individual opportunities, entries, risk, and trade management. This is the kind of work that sits behind the names we’re considering.

For now, I’m interested. The broader crypto environment has improved enough to deserve my attention and thus my money. The next question is whether these individual setups can continue to perform as well as they have.. and if there are any additional entries lurking.

If you enjoyed the writeup, as well as the current position pictures (something most Substack writers DO NOT include), subscribe to the newsletter for free.

And if you want to reach out to me, you can do so on X at @capitalflows or by messaging me here on Substack.

Thanks for reading.

Hamilton

Read more

Rates are higher. The market has been pulling back. You can make a perfectly reasonable argument for being cautious.

I have been cautious.

But this morning I’m seeing something that makes me willing to take more risk.. stocks I’ve been stalking are starting to act better while investor and trader sentiment has become worse. A lot worse.

I think yesterday may have been the washout. And I think it’s time to start buying again.

Let me show you what I mean.. because there’s a big difference between that and buying everything under the sun.

The fear is already here.. and it’s expanding

The latest AAII survey puts bullish sentiment at 28.8%. Its historical average is 37.5%.

Bearish sentiment is 53.3% compared with a historical average of 31.5%. A week earlier, it was 39.3%. The bull-bear spread is now −24.5 percentage points.

There are more people afraid to buy stocks right now than at any point in the last year:

This is a weekly survey about the next six months. It doesn’t take into account today’s rally and I wouldn’t necessarily attribute the whole thing to yesterday’s Fed announcement.

But what it does give me is context. A lot of people are already leaning bearish.

And maybe they are right. They certainly were back in early 2025. There’s nothing clever about buying a stock that keeps falling because you’ve decided everyone is just too pessimistic

There’s a fine line between being contrarian and being an asshole. Many dance on both sides.

What really gets my attention is when pessimism stops confirming what I’m seeing through price action. The reasons to sell may still be there but the selling itself large stops. Then individual stocks begin breaking out.

That’s when I know that something has fundamentally flipped.. and it’s time to act.

Yesterday may have cleared something out

The Fed raised rates 25bps yesterday.. taking the target range to 3.75%-4.00%.

The move was expected. The Fedwatch tool had a 92% chance of a rate hike heading into the FOMC decision. But the messaging that accompanied the rate hike left room for more potential hikes.. 16 of 18 Fed voters projected at least one more increas this year.

Stocks were higher prior to the announcement and took a nose dive once Warsh started talking. But I want to be careful with the whole “washout” thing.. the S&P 500 closed down 0.4% and the NASDAQ was basically flat.

It’s what was going on under the surface that mattered more. SPY traded roughly 1.5 times its previous 20-session average.. and finished above its intraday low.

So my view is that we may have seen a flush near the end of this pullback.

If it looks like capitulation, sounds like capitulation, and smells like capitulation.. you buy the accompanying rally over the next week and ask questions second.

Some of the best buys you’ll ever make are going to be from bottoms formed by traders and investors begrudgingly tapping out and selling their positions.

And from their misery comes our opportunity.

Here are two things I am looking to buy today

SPCX and INTC are the two charts I want to focus on here.

SPCX is the first range breakout I’m looking at.

There’s a lot going on here so I am going to do my best to summarize it briefly..

The range SPCX has traded in over the last few months give us a durable base to buy a breakout from.

The bottom of the range is clearly marked near 104.50 and the top of the range is sitting somewhere around 153.00.

The VRVP indicator (the volume bars on the right) show us volume by price. That’s important when establishing whether a range is a durable base to buy the breakout from. In this case.. it is as the volume appears more like accumulation than distribution.

The anchored VWAP from the all-time highs shows us the average fill price based on volume. It gives us another tool to see if the average fill is in profit or at a loss at current prices. It also acts as a dynamic support and resistance level to base risk around. In this case.. the AVWAP is sitting around 145.50, offering dynamic support as price trades above it.

A breakout above the 153.00 neckline (and close) shifts the path of least resistance for price higher. The durable base that has been building should act as support on any pullback in price. And trend should then shift higher towards our profit targets.

Entries, stops and take profits have their own set of rules: nothing less than a 3:1 setup is looked at, with a preference for 4:1 or higher.

An entry at the 153.00 area gives us a fighting chance to catch the breakout above the durable base.

Stops are more complicated. I use a combination of price structure, volatility, and common sense.

With a 4.47% ADR, SPCX is considered a relatively high beta trade. That means any volatility-based stop would need to have (at least) a 2-3xATR move to give the trade enough room to breathe.

A 2xATR move at 140.50 would put it right underneath the most frequent base fractal that has been built out. This gives my stop two opportunities to hold: one based on previous price action and the other based on volatility.

Then we shift our attention higher towards the price target. The 1.618 fib extension is generally my first price target. But in the case of SPCX, given that its a recent IPO and that there is virtually no overhead resistance to fight through (based on the VRVP), my price target shifts to the 2.618 fib extension for a potential all-time high breakout.

The totality of the trade offers a 5:1 reward-to-risk setup.

There’s also an opportunity to add an additional sleeve of convexity through the options chain. I won’t get into our process for deciding which options contracts to play as that could be an entire article in of itself.. but if you’re interested, join TTI and come learn and earn with us!

INTC is the other example.

Intel gained about 4% yesterday, while the broad market struggled. And it’s up another 9% today at the time of writing this. That’s called relative strength.. and I want to own it.

The trade idea follows the same logic with the additional to a momentum angle — INTC is trading within a bullish momentum regime and as of today is showing a acceleration of bullish momentum.

We also added a sleeve of convexity here. The options chain is a fantastic way to add some leverage to the trade without sacrificing risk as the deeply discounted contracts offer an incredible R:R.

Developing these trade ideas is part of our bottom-up process called our Hit List framework which works in tandem with our top-down process called our Market Blueprint framework. Combining these two processes gets us into the right stocks at the right time.

Note: TTI may have taken both of these trades by the time of this Substack article’s posting. Neither of these are buying or selling recommendations. They simply walk through the thought process of why and how I am trading these.

This is what separates TTI and myself from most of the rest of the market.. we don’t trade off of vibes or second guesses.

The rules are simple:

Trend tells me the direction of the stock. Relative strength tells me how it’s doing against the market. Momentum tells me whether the move is gaining or losing traction. The horizontal level gives me a place to evaluate an entry.

However.. just because everyone hates the market right now doesn’t necessarily mean I’m going to go out and buy everything.

That’s the part of being contrarian right now that I think gets lost with most people. When sentiment gets this negative, I pay closer attention to stocks that start contradicting it. Because when things stop doing what you expect them to do.. it’s time to act.

What I’m changing about it right now

I’ve been cautious ever since the Leopold Aschenbrenner blow up in June.

The AI-trade blew a hole in the market so big that you could stuff half of Substack’s authors egos into it.

But I’m increasing my willingness here to buy the areas most impacted by the AI-trade.. semiconductors, software, industrials, etc. As a matter of fact, I’m aggressively looking to buy them.. as is evidenced by todays INTC and SPCX buys.

That’s what I mean by “it’s time to start buying again.”

There may be a retest. Some of these breakouts may fail. If the indexes lose the recovery structure and the stocks leading this move start failing their own levels, I’ll reduce risk again. I’m not going to keep adding because I wrote about an opportunity today.

I could be wrong about the washout. Each trade still needs a defined exit, and position size has to account for the fact that an exit can be worse than planned.

And if you’ve read this far.. RBRK, SWKS, AMD, etc all look really good too. But you can’t own them all.. so develop a process to find which ones deserve your money.

Inside TTI Membership, this is the work we do continuously: connect the market backdrop to the sectors and stocks offering setups, define the entry and risk, then manage what actually happens. Today’s read is one part of that ongoing process.

Join TTI Today

I’m writing this today as an opportunity for you to get inside my mind as someone who trades risk for a living. I have no idea if these trades will work or if the indexes truly have bottomed. But at least in a few weeks.. we’ll have the track record to talk about it.

Everyone’s scared. But there are trades to take.

That’s enough for me to get back to work on the long side.

Thanks for taking the time to read.

Hamilton

There are still stocks I want to own. Plenty of charts worth looking at. But when I run through the bigger picture, there’s less and less supporting the idea of putting more money to work right now.

So.. I want to slow down a bit.

A stock can make it onto my watchlist and still not be something I’m willing to put a full position into. The setup might be there. The market behind it might not be. And that matters when it’s my money on the line.

TTI Market Desk, September 16, 2026 stock-close snapshot. The posture is “Reduce aggression”: favor established leaders, defined risk, and fewer simultaneous bets.

In How I Read the Market Before I Buy a Stock, I walked through why I start with the bigger picture before looking for a trade. Well.. this is the part where that work needs to change what I actually do.

Otherwise I’m just looking at a dashboard. And I have enough things to look at already.

The Market Desk and the Market Blueprint process are included in TTI Membership, along with our research and live coaching. Let me walk you through what I’m looking at tonight and what it changes.

What the market is telling me

If I only looked at the S&P 500 and Nasdaq, I could still make a decent case for buying a pullback. Their longer term trends remain intact. Tonight the Desk has both classified as pulling back within an advance.

And maybe that’s all this ends up being. A pullback.

But I also want to know what the stocks inside those indexes are doing. How many are holding their trends? Is the strength spreading? Or are a handful of big names doing most of the work?

Across the Russell 1000 stocks covered by the Desk, only 19% are above their 20-day average, 29% above their 50-day, and 47% above their 200-day.

Look at those numbers for a second. Less than a third of the stocks are above their 50-day. Participation has weakened over the past four weeks too.. so I’m looking at a market where fewer stocks are holding up, and that number has been going in the wrong direction.

Market Desk participation snapshot, September 16, 2026. The percentages show stocks above each trend reference; the red figures show the change over four weeks.

There are also 158 stocks making new 63-day lows, against just 12 making new highs. The comparisons I use to look at risk appetite show weakness in equal-weight participation, small caps, semiconductors, and cyclical consumer stocks. Meanwhile, leadership is concentrating in the mega caps.

That’s a lot to ignore just because I found a chart I like.

There’s still strength in places. Energy and Health Care are marked as leading in tonight’s rotation view. I want to know that because it helps me narrow down where to look. Financial conditions, on the other hand, are mixed and deteriorating.

This is why I work through the whole Blueprint. Direction, participation, rotation, financial conditions, and risk appetite. Each tells me something a little different. I don’t need all of them to agree perfectly.. good luck waiting for that. But when several start weakening together, I want a much better reason to take another trade.

Work through the market with us.

What “reduce aggression” changes

First thing.. I reduce what I’m willing to lose on a new position.

I still need an entry, a stop, and a reason to believe the trade is worth taking. None of that goes away. If the chart requires a certain amount of room, I adjust the size around it. Buying less of a bad setup doesn’t suddenly make it a good one.

Then I look at how much of the same bet I’m already making. If I own several stocks in the same sector, all depending on the same theme continuing higher, do I really need another one?

Sometimes another ticker is just more of what I already own. Different company. Same thing that can hurt me.

As far as stock selection goes, I want the names that are holding up. Established strength, support from the sector and industry, and somewhere sensible to get into the trade. A stock being down a lot doesn’t do much for me on its own. It can get cheaper. I want a reason to own it beyond how far it’s fallen.

I also go back through the risk that’s already in the account. Is the trade still doing what I wanted it to do? Is support holding? Am I giving it room because the plan calls for that.. or because I just don’t want to take the loss?

Those are different things.

The Desk tells me to do that review. The individual trade still has its own structure and management plan. If a position is behaving well, I can give it room to work while being a lot more cautious about opening the next one.

So no.. “reduce aggression” doesn’t mean sell everything. It doesn’t mean I’m suddenly shorting the market or calling for a crash. It means I want less money depending on everything going right at once.

How this can save me a lot of money (and pain)

Here’s a simple example of why I care about this.

Say I take three trades and risk $1,000 on each. All three lose the amount I planned for. I’m down $3,000.

Now take those same trades with $500 of risk each. Same entries. Same losers. I’m down $1,500.

Still wrong on all three trades.. but I’ve kept another $1,500 in the account.

That’s just an illustration, not a result from our system. And it assumes I get out at the planned loss. Gaps, slippage, and costs can make the actual number worse. But you can see why the amount I’m willing to lose matters before I ever get to whether I picked the right stock.

The recovery math matters too. Lose 10% of an account and it takes an 11.1% gain to get back. Lose 20% and now I need 25% just to get to even.

I’d rather have the next good stretch build on the capital I kept than spend it trying to dig myself out of a hole.

Of course the market can turn around tomorrow and make all this caution look unnecessary. Smaller positions mean less participation if it does. A trade I pass on might run without me. It happens. I’m willing to accept that when the evidence looks like this, knowing the process can be early or wrong.

But I’m NOT going to stop scanning the market, building a watchlist, and planning out my trades.

I still want to see which industries are holding up. Which stocks keep showing strength. Which charts are building something useful while the rest of the market struggles. Reducing risk and doing that work can happen at the same time.

If participation improves and price starts confirming it, I want to have already done some of the homework. I can go back to those names, check the entry and where the idea fails, and decide whether it makes sense to put more money to work.

That’s where the making money part comes back into it. I want capital available AND a list worth working from. Sitting through a rough stretch with too much exposure can make the next opportunity harder to take, even when it’s right in front of you.

This is what I want TTI to help you do

I can hand you a list of strong stocks. But it still leaves a pretty important question unanswered..

How much risk should I be taking in this market?

That’s what the Market Blueprint helps me work through before I get carried away with an individual chart. It connects the market to the sectors and industries I’m watching, then to the stock and the actual trade plan.

The same chart might deserve a smaller position today. Or it might stay on the watchlist for now. I want members to understand how I get to those decisions, including what I’d need to see before becoming more aggressive again.

Inside TTI Membership you can work through that with us using the TTI Trade Desk. You can study shared entries and management in the Trade Feed, bring questions to live coaching, work through the education, and join our private Discord with live trading every weekday.

I want you to understand why we’re taking a trade, why we’re passing on one, and why sometimes the best adjustment is simply putting less money into the next idea. Especially when you really like the stock. That’s when having a process to come back to is useful.

Tonight, mine says reduce aggression.

I’ll keep looking for the next trade. I’m just asking more of it before putting money behind it.

Join TTI Membership and work through the market with us.

If you find this kind of content valuable to your portfolio, consider subscribing for free to get all of the free articles and notes throughout the week.

Market observations and screenshots reflect the September 16, 2026 stock-close snapshot, not a live reading. Some financial-condition inputs update on a different schedule.

The Trading Initiative provides educational market research and decision-support tools for informational purposes. Nothing in TTI is personalized investment advice or account management. TTI does not determine what is suitable for you, place orders, or manage your money. Trading and investing involve substantial risk, including loss of principal. Options can expire worthless and may result in a 100% loss of the premium committed. Past performance does not guarantee future results. You remain responsible for your decisions, position size, orders, and execution.

Read more

Read more

Read more

Read more

You can understand a company’s business, believe in its future, and know every level on its chart. You can spend hours waiting for the entry to improve.

Meanwhile, an entire group of stocks you barely follow can be building the kind of trends you keep hoping your favorite stock will develop.

That’s a difficult problem to recognize because you’re doing the work. You’re reading, watching, drawing levels, and staying informed. From the inside, it feels like preparation.

But all that effort is happening inside a list you may never have questioned.

The decision about where to look comes before the decision about what to buy. And if familiarity keeps making that first decision for you, better entries can only solve part of the problem.

In The market matters more than the stock, I laid out the order I use to make sense of the market:

Market → sector → industry → stock → trade.

I want to spend more time in the middle of that process. Because between having a view on the market and drawing an entry on a chart, there’s a decision that deserves far more attention:

Which stocks have earned a place in front of you?

People like what they’re familiar with

Think about how a stock ends up on your screen.

Maybe you’ve traded it before. Maybe you use its products. Maybe someone you follow talks about it every day. Over time, you learn its behavior and develop an opinion about what it should be worth.

There’s value in knowing a company. The problem starts when that knowledge becomes a permanent claim on your attention.

A weak week gives you something to explain. A failed breakout becomes something to wait through. Strength somewhere else looks less interesting because you haven’t spent the same amount of time understanding it.

You keep asking when your stock will start working.

Eventually, that’s the only question you’re researching.

For a trader trying to participate in sustained moves, this creates an opportunity cost that never appears as a line item in the account. Time spent defending one idea is time you can’t spend investigating another.

And the more attached you become, the easier it is to turn a trade into a long-term investment thesis without ever making that decision explicitly.

The company may have a wonderful future. Your trade still has a particular timeframe, an entry price, and capital at risk.

I want my research to respect that difference.

There’s more behind a stock than a good story

We usually discuss stocks one at a time. Their earnings. Their management. Their charts.

But companies also operate in groups. Businesses in the same industry can share customers, input costs, financing conditions, regulation, and changes in demand. A development that matters to one can matter to several of its peers.

An individual chart can therefore be expressing something larger than an individual story.

This is why I want to know what the stock’s peers are doing. If several businesses facing similar conditions are strengthening together, I have another piece of evidence to investigate. If one stock is rising while its peers deteriorate, I want to understand what makes that company different.

There’s research behind taking the group seriously.

In their 1999 paper, Do Industries Explain Momentum?, Tobias Moskowitz and Mark Grinblatt studied 20 U.S. industry portfolios from July 1963 to July 1995. They found that industry momentum accounted for a substantial part of the individual-stock momentum in their sample. Prior group performance contained information that looking at a stock in isolation could miss.

The study tested historical portfolios and specific holding periods. Applying a sector ranking to a discretionary trade is a different exercise, and the authors left profitability after actual trading costs open for further research.

My takeaway is direct: industry strength has been associated with stronger subsequent returns, and I want that tendency working for my trades. Choosing the right group can make a substantial difference to the move an individual stock delivers.

A good stock in a great sector can outperform a great stock in an average sector. The industry underneath makes that comparison more precise. Over the period I’m trading, a powerful wave of demand can matter more than how impressive a business looks on its own.

Think of it as catching a wave. Your stock has its own qualities, but the sector and industry can supply the force carrying it forward. When that force builds across a group, several stocks can advance together, and individual leaders can keep finding buyers as the move develops.

I want the wave behind my trade.

There are reasons this happens. Improving business conditions can lift expectations for several companies at once. A spending cycle can benefit suppliers across an industry. Better pricing or stronger demand can change the earnings outlook for a whole group. The individual stock is participating in a development larger than itself.

Institutional demand can reinforce that move. Imagine a portfolio manager deciding to increase exposure to an investment theme: energy supply, semiconductor spending, or infrastructure investment. That decision can produce buying across several related companies. Multiple managers expressing a similar view can create demand for the group, even though they choose different individual names.

Research on how stocks move together examines this category effect: investors group securities together and shift money into and out of those groups. That helps explain why understanding what investors want exposure to can matter alongside understanding an individual business.

ETFs provide another route. Investors can buy exposure to a sector or industry in one transaction. When strong demand pushes an ETF above the value of its holdings, market participants can buy the underlying basket and create ETF shares to sell. That process can transmit demand for the fund into demand for its stocks. The Investment Company Institute explains the mechanism here.

Many ETF trades simply exchange existing shares between investors. The connection to the underlying stocks comes through creation, arbitrage, and related trading. So I want evidence of actual flows before attributing a particular rally to ETF buying.

These forces can reinforce one another: improving business prospects attract investors, investors seek exposure to the group, and that demand helps lift individual stocks. That’s the wave I’m trying to participate in. It can also reverse, which is why I keep checking whether leadership and participation are holding up.

For me, sector → industry → stock is a way to pursue better trading results by putting several sources of strength behind the same idea. The entry and risk plan determine whether I can turn that opportunity into a profitable trade.

Subscribe now

Start wide, then get specific

A sector gives you a broad area to investigate. An industry gives you a more specific set of businesses to compare.

Technology contains businesses with very different customers and economics. Software and semiconductors can experience very different conditions. Inside Energy, producers, refiners, and service companies don’t all benefit from the same developments in the same way.

Calling the whole sector strong or weak compresses those differences into one label.

That can be useful for orientation. It’s a poor place to finish the analysis.

I start by comparing sector performance over the same periods. Here, relative strength simply means performance compared with something else, such as the broad market or another sector. A group can be falling and still outperform a market that’s falling faster, so I also need to examine its own trend.

Then I look underneath the return. How many stocks are participating? Are several names maintaining constructive trends, or is a small number doing most of the work?

The distinction matters because an index weighted toward its largest companies can look healthier than many of its constituents. Participation helps me judge how widely the strength is shared.

From there, I compare industries within the sector. I want to find where the strength is concentrated, whether it has persisted beyond a brief bounce, and which individual stocks are contributing to it.

Each step makes the next question more specific.

“What’s happening in Technology?” becomes “Which parts of Technology are holding up?” That becomes “Which companies in those industries are leading, and which have a usable setup?”

That’s a much more focused research session than opening the same ten tickers and hoping one looks better today.

A good story still has to face the comparison

The Energy-versus-Technology comparison that prompted this article is a useful example.

In our saved market snapshot, from the June 30 close through September 8, 2026, the Energy sector ETF, XLE, gained 21.95%. The Information Technology sector ETF, XLK, lost 1.39%. Those are price returns over the same interval, excluding dividends.

Someone could believe deeply in Technology’s long-term importance and still recognize that Energy had been the stronger sector over that period.

Both observations could fit in the same process. The longer-term belief wouldn’t need to disappear for the research list to change.

That comparison alone wouldn’t tell me which Energy stock to buy, whether its move was already extended, or whether Technology contained an excellent individual setup. It would give me a reason to spend time investigating a part of the market I might otherwise overlook.

The names at the top of the table will change. That’s exactly why I want a method for comparing them.

If I build my process around one sector always leading, eventually I’ll have to choose between defending the process and responding to the market.

I’d rather build the ability to change my list.

The industry is where the search gets interesting

Thomas Bulkowski explored this in his Industry Relative Strength study. He tracked 512 selected stocks across 44 industries from January 1995 through November 2007, ranking the groups by their previous six months of price performance.

In one test, he bought all the stocks in the top-ranked industry and sold when its rank fell below 14. Across 114 trades, he reported an average gain of 28.1% per trade, compared with 2.3% for the S&P 500 over the same holding periods.

The industry you choose can make a substantial difference to your trading returns. In Bulkowski's test, buying industry leadership produced a much stronger average result than the benchmark over matching holding periods. That's why I want strength in the sector, the industry, and the stock: I'm looking for several forces that can help a trade become profitable.

Imagine a sector that’s outperforming the market. You look inside and find three different conditions.

One industry has several stocks trending higher and holding their gains. Another has bounced sharply after months of decline. A third is being carried by one unusually strong company while most of its peers struggle.

The sector ranking put all three in front of you. The industry work gives you reasons to treat them differently.

For a trend-following approach, I’d investigate the first group closely. I’d want more evidence that the second group’s recovery could hold. In the third, I’d examine the leading company’s specific strength and the weakness around it.

Those are research priorities. None of those descriptions supplies an entry.

Now take the first industry. Several stocks look constructive, but one has already run far from a sensible point of invalidation. Another is forming a tighter consolidation. A third keeps failing to hold breakouts even while its peers advance.

A trader attached to finding something that “hasn’t moved yet” may be drawn to the third stock. It’s easy to imagine the upside if it catches up.

But lagging can also be evidence. What explains the stock’s failure to participate in favorable conditions? What would have to change before its chart earns more confidence?

I want to answer those questions before treating the distance to a previous high as an opportunity.

This also leaves room for exceptions. A strong stock in a weak sector may have a company-specific catalyst worth researching. I want to understand the exception well enough to make a deliberate decision about it.

Working from the top down gives me a starting order. I still have to think at every step.

Eventually, the chart has to offer a trade

This is where a good research process can become dangerous if you ask it to do too much.

You’ve identified a strong sector, found an industry with broad participation, and narrowed the list to an individual leader. After that much agreement, buying can start to feel like the natural conclusion.

There’s still work left.

Where would the trade begin? What would price and volume need to do? Where would the setup fail? Can you take that risk at an acceptable position size, given the other positions you already hold?

For example, suppose the stock is consolidating beneath resistance. A possible plan could require price to clear that resistance with volume supporting the move, along with a defined level whose failure would invalidate the setup. A trader using a retest entry would need to specify what a successful hold looks like before placing the trade.

The details depend on the setup. They need to exist before the order.

If the stock runs too far before entry, the distance to invalidation may make the trade unattractive. If earnings are approaching, that event may change the risk. If the trigger never appears, the research can end with a stock on a watchlist.

Take our current position on Dropbox (DBX) as an active example (as of today):

The technology sector has been volatile but the software industry has shown characteristics of new leadership and DBX ticked all of our boxes for a breakout we wanted to own.

I went into deeper detail on how we set up our trades in my How We Found Dropbox Before the Breakout article.

You don’t have to turn every useful observation into a position.

There’s also a portfolio consequence to finding several attractive stocks in one industry. They may respond to the same event and weaken together. The group strength that helped you find them can become shared exposure once you own them.

Three ticker symbols can still leave a lot of your risk tied to one underlying idea.

That’s another reason the group belongs in the process all the way through to position sizing and management.

Change the way you build your watchlists

The practical place to start is the list you already have.

Beside each stock, write its sector and industry. Then write one sentence explaining why it deserves attention now.

You may discover that a list of twenty stocks is mostly a view on two industries. You may find a name you’ve kept watching for months because you once traded it well. You may also find good ideas whose place on the list is easy to explain with current evidence.

For example, as of today there are five energy-related stocks in our top ten strongest stocks universe: PSX, DINO, APA, MPC, and VLO.

While all five of these stocks could certainly be great stories, the odds of a stronger sector and industry push are the likely reason.

That exercise tells you something useful about how you’ve been allocating your attention.

Then choose a regular review cadence that fits your holding period. Compare groups over consistent intervals, look at participation, inspect the industries underneath, and bring the strongest relevant candidates into your chart work. A shorter window can help you notice change; a longer one gives that change context.

Keep the comparisons consistent enough that you can tell when the evidence has changed. Continually switching timeframes until a favorite stock looks good defeats the purpose.

For each candidate, record what earns further attention, what would trigger a trade, and what would make you pass. Revisit those reasons when you review the list.

You can also apply the process to an idea found from the bottom up. When a scanner produces an interesting stock, work back through its industry and sector before deciding what the result means.

Over time, that gives your watchlist a way to admit new opportunities and release old ones.

This is the connection we work on inside The Trading Initiative: using market context and stock research to build trade plans with clear triggers and risk. The TTI Trade Desk and live coaching support that process. You can learn more about Membership here.

The ability I want a trader to develop is independence from any particular list of names.

You can have favorite businesses. You can have ambitious ideas about the future. You can study a company for years and still decide that another part of the market deserves your attention this week.

There will always be more stocks than you have time to understand. Part of becoming more deliberate is learning what deserves that time, and allowing the answer to change.

Before you open the same chart again, give yourself a moment to ask why it’s still first in line.

If you want to read my thoughts every morning, sign up here for free below:

Subscribe now

I write about capital flow, market cycles, sector rotations, hot tipz on stocks, and whatever else I think is cool.

Feel free to reply back to any of the newsletters and talk shop.

And follow me on the other platforms..

Follow me on X: @capitalflows

Follow me on YouTube: @thetradinginitiative

Read more