Financial News vs. Noise
As a dip buyer days like yesterday are gifts, nice selloffs in an uptrend. Things looking green this morning, but its’ early. Yesterday’s move was crazy, and the only explanation I have seen was from some trading in 0DTE options. As long as it has nothing to do with traders changing their mind on Fed rate cuts then I see any dip as a buying opportunity. Vilified Zero-Day Options Blamed by Traders for S&P Decline-Bloomberg. I am an avid trader of 0DTEs, I think they provide opportunities that weeklies and quarterlies do not. I also think we will see more trading of what’s out there, and eventually we will have 0DTEs for all stocks with active options markets. TBH, if they create more moves like this I think that creates opportunities.
So far this morning it looks like all the shitco’s are the strongest movers, a good sign that risk taking maybe back.
My favorite trading vehicle in times like this are puts on any VIX ETP. Remember, all of these are horribly designed and set up to move towards zero. The cool thing about VIX is that it needs continued fear to be elevated, so spikes are often retraced over the preceding days. DO NOT OUTRIGHT SHORT A VIX ETP, use puts. Anyone who has lived through Volmegeddon knows that shorting VIX ETPs is a recipe to eventually go broke.
Along with commodities, I think the emerging markets are going to be a place of interest next year. Yesterday I used the weakness to buy EWZ (Brazil), which is one of my favorites.
Also added to gold miners with AGI.
BTU in coal is one of my top watches today, wanted a bit more of a dip or I would have picked it up yesterday.
Went into financials with SCHW, which held it’s 10 day.
I still think you buy the dips in Magnificent 7 names, but if this rally is going to continue it has to broaden out and last year’s losers will likely be where the big money is made this year. Small-Cap Stocks Are Taking Off. Forget Big Tech.-Barron’s
Don’t disagree. Investors should do this in 2024 instead of chasing the S&P 500, says Wells Fargo-MarketWatch
Wren argues that investors should trim exposure to the S&P 500’s information technology, consumer discretionary and communication sectors, which have outperformed in 2023, and take those proceeds over to other stock-market sectors, including healthcare, industrials and materials.
Doesn’t make it a good investment strategy. Of course it’s going to work if we get a bull market in stocks with declining interest rates. Monkeys throwing darts at the Wall Street Journal and astrology will work also. When it was supposed to help, it failed. Why the 60-40 portfolio is poised to make a comeback in 2024-MarketWatch
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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