Financial News vs. Noise
Today we launch NSI:
This is an emerging market ETF that excludes companies, specifically in China, that make military hardware or software that can be used against out troops.
Another weak day in the markets as they tried to rally early and sold off late. The SPX closed below its 10 day but at this point just looks like it is consolidating gains. Not seeing anything to suggest that this current weakness isn’t a buying opportunity. Of course jobs number tomorrow could change all that. The NDX has been even weaker, but GOOGL is indicated higher on the release of it’s AI model. Will see how that impacts the Magnificent 7. Yesterday we talked about the possible decoupling of yields and stocks. We saw this again yesterday with a weaker than expected ADP report. This dropped yields, and ultimately dropped stocks. At some point bad economic news becomes bad news for stocks. I don’t think we are there yet though.
For now, we continue to use weakness to add equity exposure. Yesterday we added financials (XLF/FAS). As far as our other positions, the gold and silver miners look slightly positive this morning after another weak day yesterday. The Yen is ramping on a statement about further tightening.
Japanese stocks fall, yen jumps on bets BoJ may end negative rate policy-MarketWatc
We continue to be long volatility, but starting to see signs that it is time to flip back to short. Nothing concrete yet. I will also be watching put implied volatility for tomorrow. For now it really hasn’t budged, but you could see people starting to hedge the number, which could create an opportunity for some calendar spreads. Besides that looks like a muted day ahead of jobs. I am keeping an eye on MLPs for a long trade as that could be a way to play a possible bottom in oil. ET had an undercut and rally at it’s 50 day.
In the high short interest stocks, I mentioned that retail was buying AI into earnings. So far that looks like a mistake as it is down over 9%. They are also buying BYON and BYND. After a great run last week, the high short interest names are coming back to earth this week. GME is also dropping pre market, could be a sign of a top.
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News vs. Noise
Was just talking about this with Rob Isbitts yesterday. These ETFs have great yields, but you still most of the downside, while limiting your upside. There is a better way to do this, just not sure it’s buzzworthy enough for an ETF on it. Eye-Popping Yields Mask Paltry Returns From These Funds A retail trading boom has spawned ETFs paying fat dividends, but caveat emptor—WSJ
Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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