Financial News vs. Noise
That was disappointing. Had kind of hoped since people had been selling the rips that they would buy the dip. Didn’t happen. If you are a glass half full type you may look at the Dow being green as a good sign. If you are glass half empty, then the flight to relative safety is bearish. I continue to think the semiconductors are going to lead for the time being. You can’t have this AND a bull market….
A few weeks ago NVDA was the most popular stock in the market, now it looks like a short.
Next support is around $750. So far this morning the semi’s are green as is the market.
The good news is rates went down a bit, but that could have been more flight to safety ahead of a weekend that could bring us a war in the Middle East. Rates are up this morning.
The S&P also continues to look like a short. Watch 4950 and 4900
TSLA announced another round of price cuts this weekend. Tesla Cuts US Prices by $2,000 as Sales Slow, Inventories Swell-Bloomberg. Again, looking at the weekly you could easily see $100 get re tested. Elon is going to have to pull a rabbit out of his hat with earnings.
Or he has to hope for this…
A lot of technical damage has been done here and it typically doesn’t resolve in a day. However, we still have a ton of earnings on tap, the Middle East could calm down, and you could have a Fed Head say just about anything. GDP is Thursday and PCE is Friday, so keep your head on a swivel, have hedges in place, don’t take too much risk, and watch semi’s and rates. Bottom line, the trend is no longer up. Drops like we saw last week can lead to big counter trend bounces, but until we see the trend actually turn back up the overall strategy changes. I will continue to buy dips, but often will structure trades so that I don’t lose if I am wrong. I will also look for spots to add hedges, this could be in SPY, VIX, SMH, and/or regional banks.
Believing and being are two different things. My regional bank model flipped from long to short on Friday. It’s a short term overbought/oversold model, no nothing to do with CRE, but I do think this is still going to be a major issue. Banks Believe They Are Well-Prepared for Commercial Real Estate Fallout-WSJ
As painful as this was, it had to happen at some point. Stocks can go up in a straight line for a bit, but they eventually have to retrace some of those gains. Nvidia’s stock plunge leads ‘Magnificent Seven’ to a record weekly market-cap loss-MarketWatch
Don’t forget earnings for these guys start next week. Magnificent Seven Earnings Arrive With Stocks at Critical Moment-Bloomberg
Microsoft Corp., Meta Platforms Inc., Google parent Alphabet Inc. and Tesla Inc., all of which are among the so-called Magnificent Seven group of tech giants, will report next week.
I still think you have to be trading the Magnificent 7 stocks. For new positions I will look to finance long calls with call credit spreads on the QQQs, unless earnings season turns things around.
I get that semi’s look like a short at the moment, but this rally has been driven by the idea that the Fed would cut rates and AI. We know that rate cut expectations have come way down, and we may not get any. If AI doesn’t fuel the market, then look out below on everything. Why buying stocks in this hot sector may turn out to be a money-losing bet-MarketWatch
A crash in semiconductor stocks by 2026 has an above-average chance of happening. That’s the implication of recent research, which defines a crash as a drop of 40% at some point over a two-year period.
I would not be investing for income if we have the possibility of the Fed doing nothing this year. Bonds Are a Minefield. Where to Find 5% to 8% Yields Now.-Barron’s
This is also stupid…
“Adding exposure to high-quality bonds is a good idea for investors sitting in cash,” Matthew Palazzolo, senior investment strategist at Bernstein Private Wealth Management. “You can get an attractive level of income and price appreciation.”
T Bills also give you an attractive level of income and not principal risk if you hold until maturity.
Obesity and diabetes are out of control in this country. While I would love for medical science to try to figure out why it wasn’t an issue when I was kid and it is an issue now, I also know that’s unlikely to happen. Pharma is going to develop drugs and people are going to take them. It’s way easier than changing your diet and exercising. I currently trade LLY and NVO and have been shorting PLNT (based on less people working out, the whole woke thing was a bonus). Going to look at these companies as well, much riskier than the big guys of course. How I like to play themes is not outright buying the names, but instead putting them in our counter trend and trend models to see what works. I also like to use options so my risk is defined. Smaller biotech I wouldn’t play using counter trend models though. Opinion: Big pharma is looking to fatten profits with buyouts of weight-loss drug companies. Here are 4 candidates.-MarketWatch
VKTX, GPCR, SRRK, VTYX
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