June 27: Large caps have risen quickly and momentum builds for risky US equities

By Jeffrey Cohen
President, US Advanced Computing Infrastructure, Inc.

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We have been running our Chicago Quantum Net Score for the past few weeks and are seeing the same types of results, although the specific stock names are different.


We see overall stock market price variance lower than before. Lower price variance usually coincides with a greater desire for investors to hold equities. 

We also see the larger capitalization US Equity indices higher, although the run up seems to have stalled recently. There was significant bullish activity earlier, and now that move is being digested in the market.

Finally, our most attractive stocks, those who have market power in excess of their price risk, we see ecommerce companies, new economy stocks, and bitcoin stocks, along with the occasional turn-around or growth story stock.  In other words, our model is ranking small and mid-cap stocks with a growth story higher than traditional, large-cap companies.  The best 50 individual stocks have a maximum market capitalization of $38.7B, and many are under $1B. 
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Unfortunately, a few of those stocks are also in free-fall, where their movement greatly outweighs the variance of the moves, because previously we saw them shooting higher as well. Many of these stocks have a story to tell, either of transforming back to profitability, or in capturing huge total addressable markets (TAMs).

On the down side, we see old MEME stocks and highly risky stocks that are (at sight) almost uniformly moving without profits. These are stocks with a story and a dream...but nothing else. So, these stocks rise and fall with market trading (movement each day, but limited overall direction with the S&P 500. Many familiar names, but new ones too.

Finally, the best few stocks in our Chicago Quantum Net Score run outperform the rest, and dominate the best CQNS long portfolios. To look at the names and chart action, you would not know these are the best stocks to buy and hold. However, the model says they have a high degree of market power and will rise if the market rises, far in excess to the riskiness of their typical price movements.