Financial News vs. Noise
Somewhat of a strange day, the markets did pretty much nothing but underneath the surface a ton of stuff was working. I’m in a bunch of different discords and reading through it seemed like people were doing pretty well across the board. Pretty much every theme we have been in-gold and silver miners, solar, and oil worked out well. 50//50 on buying beaten down Mag 7 names as TSLA went crazy but NVDA couldn’t. Only real disappointment was China, which looks like it is red again. AA was also disappointing. I do think commodity stocks are going to be in play, just weren’t yesterday.
On the short side RILY continued to move down. I was also urged to take a look at Canadian Banks and ended up taking a small short in TD. The guys at Brendan Wood have some powerful corporate research given the depth of surveys they do with money managers. They are also based in Canada so I figured they would have good stuff on the banks. They did not disappoint. If you are interested here are their reports on the big banks there.
Investor Intelligence Reports-Brendan Wood International
I did end up adding some VIX, not because I think the market is going to go down, but just in case. I don’t need life insurance at this point in my life, but if you offered it to me for extremely cheap why not take it just in case? I’m an options guy, so when I go long VIX it’s options on the index. As I don’t think any VIX spike would be major, I opted for a debit spread which takes advantage of the fact that the OTM calls on VIX have a higher IV than the ITM do. Most of the time I am going to be short some VIX and I do that through puts on the ETPs as they are structurally inefficient. As an aside I would suggest you NEVER short a VIX ETP or a naked VIX option.
Our strategy remains the same—precious metals and miners, law and order stocks, any Magnificent 7 name that sells off into support, and anything else coming off bottoms as we think this rally broadens out. Balance it out with tactical shorts.
Today’s watchlist: ALB, AAL, BILL, PATH, CRWD, CHWY, MOS, ON, RIVN, TTD
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News vs. Noise
As I said, why not? Insuring a portfolio of stocks against a market crash hasn’t been this cheap in years-MarketWatch
And it shouldn’t. It only helps you achieve your goals when the stars align and bonds and stocks go up at the same time, while bonds are a risk reducer. Opinion: The 60/40 portfolio gets no respect, but it can help you achieve your financial goals -MarketWatch
I have no idea what the Magnificent 7 is going to do, but you can’t compare them to the 1970s. We have so much money pouring into the SPX and NDX, which is in effect the Magnificent 7, that I have to think that skews things. Investors beware: ‘Magnificent Seven’ are starting to resemble ‘Nifty 50’ stocks that got crushed in the 1970s market crash-MarketWatch
But when does it turn into a negative for the market? Fed’s Waller Says the Economy Is Slowing. It’s a Positive Sign for Inflation.-Barron’s
Don’t think this matters this year, but this is going to be the big debate between bulls and bears next year. Bill Ackman Bets Fed Will Cut Interest Rates as Soon as First Quarter-Bloomberg
Did pick up some CVX yesterday, in keeping with my current track record on oil stocks I’m currently in the red. Hess and 4 Other Oil & Gas Companies on the Brink of Big Earnings Growth-Barron’s
Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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