Financial News vs. Noise
My current sense is that two days in a row of red, and a red start to the pre market session is a gift for the bulls. However, I am seeing a bunch of charts that look like textbook shorts and I do know that the market’s expectations of interest rate hikes and the Fed’s expectations are going to come to a head at some point. There is nothing better than dips in an uptrend, but at some point those dips become a trend change. For now, I do not think this is anything more than a dip in an uptrend, but whenever the market proves you wrong about something the key is to be wrong for a short period of time. I do love to see headlines like this
Stocks, Bonds Drop in Tandem for Worst Start to Year in Decades-Bloomberg
I am going to be on TD Ameritrade Network, or Schwab Network, whatever they are calling it, at 9:45 to talk Magnificent 7. The key event yesterday was the Barclays downgrade of AAPL. My general feeling hasn’t changed, market structure favors the Magnificent 7 names, so if we are still in a bull market then these guys will go up. I do not expect them to have a repeat of last year, and think the better gains are to be had elsewhere.
Interesting defensive rotation yesterday as the consumer staples stocks were up nicely. I do expect the laggards from last year to do well this year, but XLP looks extended.
HSY is an interesting name here that some retail guys were buying yesterday. I would like to see it pull back a bit into the 50 day myself and will keep it on watch today.
I used the weakness yesterday to add to general emerging markets, Brazil, and China. I also added emerging markets exposure to our ETF Model Portfolio.
The action continued in the crypto space yesterday as approval of the spot Bitcoin ETF seems certain. Bitcoin rallied sharply while the miners and COIN tanked. We may have some more to say about the spot ETF race, maybe as soon as this afternoon, stay tuned. Meanwhile, Cramer had positive comments about Bitcoin and his track record there is awful.
Fed minutes come out today, don’t expect fireworks but you never know.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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