Financial News vs. Noise
The market continues to move up regardless of what the Fed is going to do and when. As I have said before, this will be important at some point, but at the moment the bulls are in firm control. I have said that I didn’t think the market would do much until this issue was resolved, and I have been wrong. This is why one of my favorite sayings is “trade based on what you see, not on what you think”. Have been having a few conversations about this and it’s interesting when you look at FinTwit you see well thought out arguments about why this market will crash. They may be right in the long term, but how much pain can you tolerate until they are. PPI is this morning, probably won’t move this market but a surprise could, remember Tuesday.
I do think this may be setting us up for something. VIX ended 2023 at 12.45 and it is now 14.01, that’s a 12% gain with an up market.
‘Volmageddon 2’ may be coming to a stock market near you, says this analyst-MarketWatch
Just to give you an idea of why I buy puts on the VXX and UVXY
UVXY is down 12% over the same period.
Yesterday’s rally was more impressive in that it did it without 5 of the magnificent 7. Meanwhile TSLA is back, now well above the 191.25 low I have been talking about. There was news about Elon’s 13G filing showing he had options on 304M shares (somebody needs to tell him about TSLT) which he needs to exercise before month end.
So, continue to buy Magnificent 7 on dips and continue to trade the themes. In no particular order:
Crypto— It was obvious that the spot bitcoin ETF would put the whole sector in play. In the better lucky than good category I was going to take some profits on my COIN calls ahead of earnings and I got deluged by calls and didn’t get to it. They reported earnings and are up 12%
Trump—Love him or hate him he’s moving stuff. DWAC is the obvious play, I own it and and talked to like 8 reporters about it yesterday. The others are the law and order stocks like GEO, CXW, AXON, and SWBI.
Anything AI related—-SMCI is killing me, I added it to my watchlist but I don’t chase, it has just gone straight up. In the could be worse category I talked to a big hedge fund manager yesterday who has been short all these stocks so I can’t complain. This is also funny: Super Micro’s stock has surged 900% in a year. Why BofA is making a ‘buy’ call.-MarketWatch. I did buy the dip in NVDA yesterday which looks good so far.
Weight Loss Drugs—As much as I hate the idea I think a pill for life and you don’t have to watch what you eat or exercise is a game changer. I currently trade NVO and LLY, not in either at the moment. At some point I will expand my watchlist out to other names when I have time.
Argentina—I think Milei has a chance to turn the country around
Precious Metals—Think this area takes a back seat when the Fed is not in the news. Covered my GDX short yesterday and went long silver (SLV) have also been long GFI. Again, not my main focus at the moment, but this area will be interesting at some point
Seeing a lot of chatter this morning about value, equal weight S&P, and small caps coming back. Maybe. We run a weekly mean reversion strategy that by it’s nature usually has a bunch of value stocks, so I’m covered if they come back in force.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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