This pick list highlights constituents of the Morningstar US Large Cap Index that we believe offer investors the best risk-adjusted return prospects. Stocks of large-cap companies where neither growth nor value characteristics predominate. Stocks in the top 70% of the capitalization of the U.S. equity market are defined as large cap.

In August, we said that a crude oil (WTI) breakout over $70 would complete a bullish inverse head-and-shoulders (H&S) pattern and open up several scenarios, with the most-common 100% extension targeting $78, or just above the highs from early July. With the strong gain of 2.3% on Monday, WTI hit an intraday high $78.38, and closed at $77.63.

Stock-market volatility has increased of late, leaving corporate insiders as whipsawed as any other investor. In the past few months, we've had weeks in which stocks pulled back. The insider-trading data from Vickers Stock Research tells us that insiders consistently used those weeks to swoop in and pick up shares. In follow-on weeks, when stocks stabilized near all-time highs, insiders pulled back on buying. Based on recent sell/buy data from Vickers, insiders remain more bullish than bearish. Vickers' benchmark NYSE/ASE One-Week Sell/Buy Ratio is currently 2.47. That's a neutral reading (improved from bearish last week); represents a third consecutive week of sentiment improvement; and compares very favorably to the 4.05 one-week ratio printed in early September. The NYSE/ASE eight-week moving average is 3.06 compared to 4.73 in mid-July. Overall, insider sentiment maintains a positive trend as the historically brutal month of September draws to a close and the historically positive last quarter of the year lies ahead.

Stocks have declined broadly recently, as positive retail sales data and a better-than-expected inflation (CPI) report were unable to offset mounting investor concerns. These concerns include the still-heavy toll from COVID-19, signs of moderating economic growth, and worries on either side that a new tax bill will pass (the GOP) or won't make it through Congress (the Democrats). As well, investors are brooding over the potential implications to the global financial system should Evergrande, a giant Chinese property company, collapse.