Financial News vs. Noise
Seeing a bunch of doom and gloom across social media but the QQQs ended up breaching the highs. It is important to note that there was a lot of red out there yesterday and the main driver was the Magnificent 7 (except TSLA). That’s not bullish and we do need breadth to widen out if this market is going to get any traction higher. The S&P is so close to it’s all time high of 4818.62 that you have to figure they are going to try to push it there.
Besides broader traction, two things I would want to see if I was going to go back to being bullish are the 10 yr coming back down:
The market managed to rally yesterday in spite of higher rates but it isn’t going to make a habit of that.
I also want to see the more speculative areas like small caps and ARK names not look like crap.
For now I continue to believe you buy the Magnificent 7 names on dips. I don’t see any catalyst for the market to go up or down big at the moment (next week we have some important data so that may change). These names have a structural advantage and are being used as cash equivalents for fully invested portfolio managers. At some point I do believe the commodity names are going to be in play, and I do have exposure to CF, CCJ, ALB, CVX, and CVE, but right now that’s more for diversification than a thought that this is going to be the area to be in. I am also currently short VIX but getting near a point that may flip long. On the short side, I am now short China and emerging markets. That’s not a long term play as I still believe at some point you want to be long here.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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