Financial News vs. Noise
Back from ETF exchange where the big topic was crypto, which also seems to be the best area of the market to trade at the moment. I figured that the spot ETFs would spur some demand in bitcoin, and that’s what we are seeing. Remember the miners are still shitco’s so they are best for trading. I’m currently long calls on BITO, MARA, COIN, and CLSK. These are all trend following models, as I don’t trust mean reversion on crypto, at least not yet. On big up days I am also trimming my winners as I still don’t trust this area like I would trust other parts of the market.
Magnificent 7 is another main area I think you should be trading. Some bad news on AAPL, which Buffett trimming his stake, and GOOGL with Open AI competing. Still think you buy dips in these names.
The dip in SPX held the 20 day EMA on Tuesday and bounced back above the 10 day MA. Until proven otherwise I think you buy dips in the market.
At some point I think we need to reconcile what the Fed is going to do with what the market thinks they are going to do, but when the market wants to go up, it wants to go up. At the moment, the bulls argue that a single hot inflation print doesn’t stop the downtrend, and that the PCE is the Fed’s preferred measure anyway. Again, I think this comes to a head at some point, but until then I am not going to fight the trend.
My favorite way to play this is puts on UVXY when it spikes. Any volatility ETP will do as these are designed to go to zero. The great thing about volatility is that when it spikes it needs a reason to stay elevated.
At some point we will see a face ripping VIX spike, which is why I use puts and do not short anything vol related.
On the short side I think your best intermediate term bet is the regional banks. Been seeing some strong inflows into SKRE as well. KRE did have an undercut and rally at it’s 10 day, but for now I look at rallies as opportunities to short.
I flipped from long to short on China yesterday. You could see China come off the mat and gain some traction, but right now I think you play it from a counter trend basis, long on dips, short on rips.
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Matthew Tuttle is the Chief Executive Officer and Chief Investment Officer of Tuttle Capital Management, LLC.
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